The shipments are part of India’s most recent tender for urea, a widely-used nitrogen fertilizer, according to people familiar with the matter, who asked not to be identified as they are not authorized to speak to the media. The volume would account for at least two-thirds of the total quantity booked, with shipments required to leave loading ports by Sept. 24.
A spokesperson for India’s fertilizer ministry declined to comment.
India is one of the biggest urea importers, making its purchases closely watched as a global benchmark. The trade is a further sign that tightness in the urea market is improving, after the war in Iran significantly disrupted flows from the Middle East — a major export region — earlier in the year. Prices for the key crop nutrient surged to a four-year high in April, but have since erased the rally.
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That’s partly due to policy changes in China. Beijing tightened control over fertilizer exports near the start of the war to protect supplies for local farmers. Authorities later loosened the restrictions by releasing an initial quota for urea, Bloomberg Intelligence said in May.
The quota has been increased in the months since to about 5 to 5.5 million tons, meaning the volume slated for the India tender would mark more than a fifth of the total, according to people familiar. They estimated that at least another 1 million tons has already been committed since the quota was opened, with one pegging it as high as 2 million tons.China customs data shows about 410,000 tons of urea was exported in June and July.
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India uses more urea than in America and Brazil combined, helped by government subsidies that keep prices for farmers far below market rates. The South Asian nation is the world’s biggest rice exporter and a major producer of wheat, sugar and cotton, making fertilizer availability crucial to its agricultural economy.