Since the beginning of this year, India has begun to implement domestic chemical fertilizer subsidies and related policy reforms. With the arrival of the end of the year, India has begun to consider import negotiations with foreign countries even though it has not handled its internal affairs well. The success of this game from the beginning of the negotiations to February next year will be crucial for India's 2011-2012 (April 2011-March 2012) fertilizer market and corporate profits. However, looking back at India’s import trade this year, it is clear that India was not successful in this year’s game with international suppliers.
The basic principle for annual import demand for urea is about 7 million tons. The basic principle of international trade is to wait for low-cost purchases, but this principle has not been reflected in India’s urea import trade. Most of the government’s import transactions this year are at global prices at highs. When done. Since April 1st this year, the three companies of the government's unified trade, the State Trading Corporation of India, the MMTC and the India Potash Corp (IPL) have signed a contract for the import of 4.6 million tons of urea, including 1.1 million tons. In the April-June arrival, the arrival price is 275 US dollars / ton. However, with the active international urea market, the price of urea quickly rose to US$300/tonne. The prices of the two contracts executed in September and October were $347/ton and $365/ton for the arrival price, respectively, and the import volume totaled 1.5 million tons. It is understood that IPL has signed a contract of 500,000 tons in the past month and the arrival price has reached 397-399 US dollars / ton.
India's annual domestic production of urea is 2100-21.5 million tons, and it needs to import about 7 million tons each year to meet the demand for more than 27 million tons of urea. At present, India has imported 500,000 tons of urea in 2010-2011, in addition to the 460 million tons of urea imported and the 2 million tons of urea supplied by Oman India’s joint-venture fertilizer company at a preferential price of US$133/ton.
The annual import demand for diammonium is about 8 million tons. The import of diammonium phosphate is just the opposite of urea. The import of diammonium in India is not purchased through the national designated companies, but the import enterprises determine the import volume and import time according to their respective commercial operations. The Indian government estimates that domestic production of diammonium in 2010-2011 will be 400-4.1 million tons, while consumer demand will reach 12 million tons. Therefore, it needs to import 8 million tons. So far, Indian import companies have signed 8.3 million tons of diammonium contracts, of which 7 million tons have arrived. In terms of price, it is worth mentioning that most importers ordered all products at the low price of international diammonium in June, and the contract price was $475-500/ton for the arrival price.
Indian industry sources pointed out that the reason why India can get a low price in the international diammonium market and in the urea market is so passive, mainly because companies participating in the government's unified import of urea are not involved in the sale of urea to the end market. No matter what price they import, they can get profit compensation, so there is no incentive to wait for the best time to buy.
Reducing subsidies for fertilizer purchases On November 19, India announced that it would substantially reduce the purchase subsidies for nitrogen, phosphorus, potassium fertilizers and sulphur. It also greatly reduced the government subsidies for diammonium sales companies, which is equivalent to reducing the profits of sales companies. Currently, the retail price of diammonium is maintained at US$221/ton, the price of potassium chloride is US$112/ton, and the government’s allowance for diammonium to the company has dropped from US$361.5/tonne to US$288/tonne. From US$326.5/tonne to US$285/tonne.
India, as the largest importer of urea and diammonium in the world and the second largest importer of potassium chloride, has an important regulatory role in the global fertilizer market. According to Indian government officials, the recent policy of cutting subsidies is mainly directed at international suppliers and hopes that international suppliers can adjust prices for the Indian market. At a recent annual meeting of the Indian Fertilizer Association, government officials emphasized and reminded foreign delegations not to blindly raise prices and undermine the balance of demand in India. They hope that they will increase their prices on a reasonable basis.
Luke Hutson, Senior Market Analyst at FMB, analyzed the Indian market. He believes that Indian companies will have an advantage in next year's fertilizer import negotiations. It is estimated that next year's contract price will be around $370/tonne. For urea, natural gas is taken into account. The price increase factor, which is lower than the price of 300 USD/ton, is not realistic; the price of diammonium may be around 520 USD/ton.
The basic principle for annual import demand for urea is about 7 million tons. The basic principle of international trade is to wait for low-cost purchases, but this principle has not been reflected in India’s urea import trade. Most of the government’s import transactions this year are at global prices at highs. When done. Since April 1st this year, the three companies of the government's unified trade, the State Trading Corporation of India, the MMTC and the India Potash Corp (IPL) have signed a contract for the import of 4.6 million tons of urea, including 1.1 million tons. In the April-June arrival, the arrival price is 275 US dollars / ton. However, with the active international urea market, the price of urea quickly rose to US$300/tonne. The prices of the two contracts executed in September and October were $347/ton and $365/ton for the arrival price, respectively, and the import volume totaled 1.5 million tons. It is understood that IPL has signed a contract of 500,000 tons in the past month and the arrival price has reached 397-399 US dollars / ton.
India's annual domestic production of urea is 2100-21.5 million tons, and it needs to import about 7 million tons each year to meet the demand for more than 27 million tons of urea. At present, India has imported 500,000 tons of urea in 2010-2011, in addition to the 460 million tons of urea imported and the 2 million tons of urea supplied by Oman India’s joint-venture fertilizer company at a preferential price of US$133/ton.
The annual import demand for diammonium is about 8 million tons. The import of diammonium phosphate is just the opposite of urea. The import of diammonium in India is not purchased through the national designated companies, but the import enterprises determine the import volume and import time according to their respective commercial operations. The Indian government estimates that domestic production of diammonium in 2010-2011 will be 400-4.1 million tons, while consumer demand will reach 12 million tons. Therefore, it needs to import 8 million tons. So far, Indian import companies have signed 8.3 million tons of diammonium contracts, of which 7 million tons have arrived. In terms of price, it is worth mentioning that most importers ordered all products at the low price of international diammonium in June, and the contract price was $475-500/ton for the arrival price.
Indian industry sources pointed out that the reason why India can get a low price in the international diammonium market and in the urea market is so passive, mainly because companies participating in the government's unified import of urea are not involved in the sale of urea to the end market. No matter what price they import, they can get profit compensation, so there is no incentive to wait for the best time to buy.
Reducing subsidies for fertilizer purchases On November 19, India announced that it would substantially reduce the purchase subsidies for nitrogen, phosphorus, potassium fertilizers and sulphur. It also greatly reduced the government subsidies for diammonium sales companies, which is equivalent to reducing the profits of sales companies. Currently, the retail price of diammonium is maintained at US$221/ton, the price of potassium chloride is US$112/ton, and the government’s allowance for diammonium to the company has dropped from US$361.5/tonne to US$288/tonne. From US$326.5/tonne to US$285/tonne.
India, as the largest importer of urea and diammonium in the world and the second largest importer of potassium chloride, has an important regulatory role in the global fertilizer market. According to Indian government officials, the recent policy of cutting subsidies is mainly directed at international suppliers and hopes that international suppliers can adjust prices for the Indian market. At a recent annual meeting of the Indian Fertilizer Association, government officials emphasized and reminded foreign delegations not to blindly raise prices and undermine the balance of demand in India. They hope that they will increase their prices on a reasonable basis.
Luke Hutson, Senior Market Analyst at FMB, analyzed the Indian market. He believes that Indian companies will have an advantage in next year's fertilizer import negotiations. It is estimated that next year's contract price will be around $370/tonne. For urea, natural gas is taken into account. The price increase factor, which is lower than the price of 300 USD/ton, is not realistic; the price of diammonium may be around 520 USD/ton.
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