Following significantly lower-than-expected bids in National Fertilizer Ltd (NFL)'s recent 1.7-million-tonne urea import tender, the Indian government is reportedly weighing plans to increase purchase volumes, provided suppliers match current rates. According to The Hindu BusinessLine, tender prices opened on June 8 have plunged over 50% compared to Indian Potash Ltd (IPL)'s previous round, even dropping below pre-Ukraine-war levels. The lowest bids came in at $449 per tonne for west coast delivery and $445 per tonne for east coast.
Price Plunge in NFL Tender
The latest NFL tender marks a dramatic decline from prior benchmarks. For comparison, the April IPL tender saw lowest bids of $935 per tonne (west coast) and $959 per tonne (east coast). Even before the Ukraine war, public sector RCF had received mid-February offers for 1 million tonnes of imported urea at $508 (west coast) and $512 (east coast). The following table highlights the price collapse:
| Tender | Date | West Coast Lowest Bid ($/tonne) | East Coast Lowest Bid ($/tonne) |
|---|---|---|---|
| IPL (previous) | April 2026 | $935 | $959 |
| NFL (current) | June 8, 2026 | $449 | $445 |
| RCF (pre-war) | Mid-February (2022?) | $508 | $512 |
Ameropa Asia submitted the L1 west coast bid at $449.30 per tonne for 2.34 lakh tonnes. On the east coast, Aditya Birla Global Trading (ABGT) hit the lowest mark at $444.90 per tonne for 5 lakh tonnes.
Supply Side: China Reconsiders Exports
The price crash is rattling major global suppliers. After announcing plans in May to resume urea exports in hopes of a market rally, China is now reportedly reconsidering. As a tender participant noted, "Our Beijing representative indicates that China is reluctant to sell at these depressed rates," adding that while the final decision rests with the L1 bidder, clearer market signals are expected later this evening.
Demand Side: India's Rabi Season Needs
India's strong domestic demand for urea is driving the push for higher imports. An official source stated: "The government is likely to enhance the quantity (from current 17 lt) if the other suppliers agree to L1 rates as India needs more Urea even for Rabi season as sales have increased in April-May due to panic buying." The government had already agreed to import 25 lakh tonnes in April after the IPL round, underscoring robust consumption.
Government's Next Move
If the government decides to exceed its 9-lakh-tonne west coast target, the L1 bidder (Ameropa Asia) will get the first opportunity to supply the entire enhanced volume. If they decline, other participating companies will be asked to match the L1 rate in order of their bid rankings. Similarly, on the east coast—where the initial target is 8 lakh tonnes—ABGT will have first refusal for any additional volume.
Analysts expect the government to clear NFL to import well beyond the original 17-lakh-tonne tender, contingent on suppliers agreeing to the rock-bottom L1 prices. The development signals a potentially prolonged period of low global urea prices, challenging producers while benefiting price-sensitive importers like India.
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