India's state-owned Rashtriya Chemicals and Fertilizers (RCF) awarded approximately 1.78 million metric tons of urea in its latest international tender, exceeding its original target of 1.7 million metric tons. This significant procurement was distributed among eight suppliers, with the volume split between 1 million metric tons for India's west coast and 700,000 metric tons for the east coast. The tender attracted bids from 21 suppliers, offering a combined 2.57 million metric tons, indicating a strong oversubscription and improved supply conditions compared to earlier tenders.
The pricing in this RCF tender marked a substantial decline from previous rounds. The lowest offers were submitted at $390.25 per metric ton cost and freight (CFR) for the east coast and $393.65 per metric ton CFR for the west coast. These prices are considerably lower than the $449 per metric ton CFR seen in India's previous NFL tender in June and drastically below the $935-$959 per metric ton prices during the April crisis-era procurement when disruptions in the Strait of Hormuz were severe. The last time offers were below $400 per metric ton CFR for both coasts was in April 2025.
China is anticipated to be the main supplier for this tender, largely due to favorable regional price conditions and government support for exports. Over 1.336 million metric tons were offered below $400 per metric ton CFR, including 615,000 metric tons for the east coast below $395 per metric ton CFR. Netbacks from these offer levels are below $370 per metric ton FOB for east coast shipments, with prilled business in China concluding down to the low-$360s per metric ton FOB for other markets. Russian prilled suppliers also saw west coast offers comfortably below $340 per metric ton FOB Baltic.
This tender result is considered a crucial pricing signal for global urea in Q3 2026. The strong competition and lower prices will provide significant relief to India's substantial fertilizer subsidy bills, which were projected to exceed the budgeted target of $1.77 trillion. India, the world's largest urea importer, heavily subsidizes urea for its farmers, selling it at nearly 90% discounted rates. All shipments from this tender are required to be completed by September 24, ahead of India's rabi planting season.
