Industry sources said India has floated a global urea tender, asking producers to supply 600,000 tonnes of urea at a discount, a document showed, as the nation looks to cut import costs and Seeks to secure a cheap supply of soil nutrients.
Industry sources said India has floated a global urea tender, asking producers to supply 600,000 tonnes of urea at a discount, a document showed, as the nation looks to cut import costs and Seeks to secure a cheap supply of soil nutrients.
India, where soil nutrients are sold below market rates, imports urea annually through tenders by authorized companies such as Bharat Potash Limited, National Chemicals and Fertilizers Corp and National Fertilizers Limited.
One of the sources said, "This is the first tender where we are seeking discounts at the lowest price discovered through regular tenders... We are essentially locking in the discount number."
The tender seeking discount on supply in one year from March 1 will close on January 23, valid till February 5, the document shows.
Sellers have to offer discount in the form of percentage which will be applicable on the delivered price of urea. The delivered prices are determined through four to five regular tenders per year for supply to the east and west coasts of India.
The tender document reveals that urea producers can participate in the tender either directly or through their "Authorised Exclusive Marketer".
Citing preliminary estimates, the source said India aims to import around 4 million tonnes through regular tenders in a year from March.
A second source said the winner of the new tender would be assured of an average supply of 50,000 tonnes of cargo per month to India.
Higher global prices mean India's fertilizer subsidy bill will rise to a record 2.25 trillion Indian rupees ($27.2 billion) in the fiscal year to March 31 from about 1.5 trillion rupees in the previous year.
Urea accounts for about 70% of India's total fertilizer subsidy.
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