The government is likely to clear NFL to import urea well beyond its original 17-lakh-tonne (lt) tender. Bids opened on June 8 revealed prices that are significantly lower than the previous round held by Indian Potash Ltd (IPL), even dropping below pre-war levels. | Photo Credit: VENKATACHALAPATHY C
Following significantly lower-than-expected bids for National Fertilizer Ltd (NFL)’s recent 17-lakh-tonne (lt) urea import tender, the Indian government is reportedly weighing plans to increase its purchase volume, provided suppliers match the current rates. Opened on June 8, the latest tender prices have plunged over 50% compared to Indian Potash’s (IPL) previous round, even dropping below pre-Iran-war levels.
However, this 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. “Our Beijing representative indicates that China is reluctant to sell at these depressed rates,” noted a tender participant, adding that while the final decision rests with the lowest (L1) bidder, clearer market signals are expected later this evening.
The government is likely to clear the NFL to import urea well beyond its original 17-lt tender. Bids opened on June 8 revealed prices significantly lower than those in the previous round held by Indian Potash Ltd (IPL), even dropping below pre-war levels.
For the NFL tender, the lowest bids came in at $449 per tonne for west coast delivery and $445 per tonne for east coast delivery. This marks a massive drop from April, when the government agreed to import 25 lt of urea after IPL received the lowest bids of $935 per tonne (west coast) and $959 per tonne (east coast). For comparison, prior to the war against Iran, the public sector RCF had received mid-February offers for 10 lt of imported urea at $508 (west coast) and $512 (east coast).
“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,” an official source said.
Ameropa Asia submitted the lowest West Coast bid at $449.30 per tonne for 2.34 lt. Sources note that if the government decides to exceed its 9 lt West Coast target, the L1 bidder 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, Aditya Birla Global Trading (ABGT) hit the lowest East Coast mark at $444.90 per tonne for 5 lt. Should the government expand procurement beyond the initial 8 lt for the East Coast, other companies will likewise be asked to match ABGT’s L1 offer if ABGT declines to supply the entire extra volume.
Industry sources said that the global Urea rate (FoB) on Wednesday was about $450 per tonne due to an Indian tender, whereas the average rate last week was $577 per tonne.
On the reasons for the fall in global prices of Urea, Aparna S Sharma, an additional secretary in the Department of Fertilizers (DoF), said that some new countries (including China) have come into the market for exports, boosting global supply. Besides, India’s strong stock position and seamless domestic production could be the factors impacting rates, she said.
“The reduction of the prices is because of entry of new countries into the market, and they have entered in a big way. So with this, the prices have come down sharply. Moreover, our stock position and our production is going on seamlessly. So maybe that is also an indication to those countries from whom we are importing, that our requirement may come down,” she said and quipped: “let’s see how this trend continues.”
On a query about further import requirements for the Kharif season, Sharma said it would depend on domestic production and added that it might be 10-20 lt more. But she noted that, given the forecast of a “below normal” monsoon in the Kharif season, it is difficult to estimate imports.
The DoF’s additional secretary also said that the government will have a re-look at the subsidy. The DoF recently sought about ₹3.4 lakh crore in subsidy allocation from the Ministry of Finance, which is nearly 100 per cent over the budget estimate of ₹1.71 lakh crore.
Asked whether the ₹3.4 lakh crore fertiliser subsidy estimates for 2026-27 would be revised downward due to the fall in global Urea prices, she said it was a preliminary assessment based on the presumption that the trend (high global rates due to geopolitical tensions) would remain the same. “But, as a result of the recent tender that has been done on behalf of the government by our one of our entities will definitely have cause to reassess the subsidy figures. We will have a re-look on that,” Sharma said.
However, she clarified that the reassessment would depend on confirmation of the quantities offered by the suppliers in the NFL tender and on the actual imports.
Published on June 11, 2026
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