India's Urea Import Offers Fall 12% as Global Fertilizer Market Tightness Eases

India's state-run Rashtriya Chemicals & Fertilizers Ltd. (RCF), which procures urea on behalf of the government, has received import offers markedly below what the country last paid. According to people familiar with the matter — who declined to be named given the commercial sensitivity of the information — the west coast tender for 1 million tonnes drew offers totalling approximately 3.1 million tonnes, with prices quoted between $393.65 and $435 per tonne.

The east coast tender for 700,000 tonnes attracted submissions of 2.4 million tonnes, with bids ranging from $390.25 to $435.5 per tonne. The strong oversubscription on both tenders — more than three times the required volume on the west coast — underscores how quickly global supply sentiment has shifted. The fertilizer ministry did not respond to queries sent after office hours.

The speed of the price correction has been striking. India paid as much as $959 per tonne for urea supplies in April 2026 — nearly double pre-war levels — as conflict-related supply disruptions tightened the global market sharply.

By the June tender, prices had already crashed to less than half that level as global supply eased and demand softened. The current round of offers, arriving approximately 12% below even those June prices, suggests the downward trajectory is continuing. For context, the present bid range of roughly $390–$435 per tonne represents a dramatic unwinding from the April peak, though prices remain above pre-conflict benchmarks. The pace of adjustment will be closely watched by India's Department of Fertilizers, which manages procurement subsidies.

Despite the price relief, structural risks persist. Vessel traffic through the Strait of Hormuz — a critical artery for global fertilizer trade — has remained well below normal since the war broke out in February, according to the source report. The waterway's disruption was central to the supply squeeze that drove prices to record highs earlier this year.

US-Iran peace talks, which could help normalise traffic through the strait, remain stalled, with both sides continuing to assert control over the crucial passage. Until shipping through Hormuz stabilises, the fertilizer market's recovery remains contingent on alternative supply routes and restocking by non-affected producers. Any fresh escalation could rapidly reverse current price trends, making procurement timing a strategic call for Indian importers.

India is among the world's largest urea importers, making global price swings directly consequential for both the government's subsidy outlay and farm-level input costs. The government provides urea to farmers at highly subsidised rates, with the Centre absorbing the difference between market procurement prices and the controlled retail price — a burden that ballooned when import costs nearly doubled during the April price spike.

A sustained decline toward the lower end of current bid ranges would provide meaningful fiscal relief and could support a more stable input cost environment for farmers entering the rabi crop season. However, final purchase prices from this tender round are not yet confirmed, and the spread between the lowest and highest current bids — roughly $45 per tonne — suggests significant uncertainty remains in supplier pricing.