India’s Urea Import Costs Plunge 50% as Global Prices Collapse, June 12

Global urea prices have crashed over 50% in the past two months, forcing India to rethink its fertiliser subsidy spending. State-run National Fertilizers Ltd received bids as low as $445 per tonne on June 8, down from $935 per tonne in April. The government now plans to increase import volumes and may cut its ₹3.4 lakh crore subsidy estimate for fiscal year 2026-27.

Tender Bids Hit Historic Lows

National Fertilizers Ltd’s June 8 tender saw the lowest bids at $449 per tonne for west coast delivery and $445 per tonne for east coast delivery. This marks a 52% drop from Indian Potash Ltd’s April tender, which received bids of $935 per tonne (west coast) and $959 per tonne (east coast). The prices have fallen below pre-war levels, with mid-February offers at $508 and $512 per tonne before the Iran conflict escalated.

Government Weighs Larger Import Volumes

The government received bids exceeding 6 million tonnes for the original 1.7 million tonne tender, signalling strong supply availability. Officials stated India will likely increase purchase volumes beyond the initial 17-lakh-tonne allocation if suppliers match the lowest bid rates. The move comes as sales surged in April-May due to panic buying ahead of the rabi sowing season.

Subsidy Budget May Face Major Cuts

Aparna S. Sharma, additional secretary in the Ministry of Chemicals and Fertilisers, confirmed the government will reassess subsidy figures based on the new tender results. The initial budget of ₹3.4 lakh crore for FY 2026-27 was set on higher international price assumptions. Lower import costs could significantly reduce government spending while improving fertiliser availability for the rabi season.

Market Dynamics Shift as New Suppliers Enter

The price collapse stems from new countries entering the global urea market in large volumes, according to government officials. China, which announced plans to resume exports in May, is now reconsidering due to depressed rates. India’s healthy domestic stock position and uninterrupted production have also influenced market sentiment, reducing urgency for premium-priced imports. Tender prices have plunged over 50% compared to earlier rounds.

Final Thoughts

India’s urea import costs have collapsed 50% to $445 per tonne, forcing a subsidy budget review that could save billions. Fertiliser stocks face margin pressure as cheaper imports flood the market, though lower costs benefit farmers and food security.

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