Fertiliser demand and exports

Indonesia is moving to sell up to 1 million tonnes of fertiliser abroad after four countries asked for its urea, with confirmed demand already above 750,000 tonnes. (en.antaranews.com) Agriculture Minister Andi Amran Sulaiman said on April 22 that India asked for about 500,000 tonnes and Australia agreed to take 250,000 tonnes in an initial shipment. He said Brazil and the Philippines also requested supplies, though their volumes were still being discussed. (en.tempo.co) Cabinet Secretary Teddy Indra Wijaya said Indonesia was separately negotiating exports of about 1 million tonnes to India, Brazil, Thailand and the Philippines. That planned volume comes on top of the 250,000 tonnes already being shipped to Australia, according to the president’s office statement cited by regional media. (thehindubusinessline.com, (thestar.com.my)) The export push comes as fertilizer trade has been disrupted by conflict around the Strait of Hormuz, a shipping route Indonesian officials say carries about 30% of the world’s fertilizer flows. Deputy Agriculture Minister Sudaryono said the disruption helped lift urea prices to about $690 a tonne on April 1 from roughly $350-$380 in early January. (en.antaranews.com) United Nations agencies have also warned that the Middle East war and the near halt to shipping through Hormuz are squeezing access to food, fuel and fertilizers for developing countries. Reuters reported on April 14 that fertilizer shortages tied to the Iran war were already a pressing concern for poorer importers. (news.un.org, (finance.yahoo.com)) Indonesia says it can export because domestic supply is still covered. Sudaryono said national fertilizer production capacity is about 14.5 million to 15 million tonnes a year, while Pupuk Indonesia produces 9.4 million tonnes of urea and domestic urea demand averages about 7 million tonnes. (en.antaranews.com) Amran gave a lower current-production figure on April 22, saying Indonesia was producing 7.8 million tonnes of fertilizer against domestic demand of around 6 million tonnes, leaving room to consider exports of about 1 million tonnes. The different figures reflect officials describing different measures of output, but both point to a surplus over home demand. (en.tempo.co, (en.antaranews.com)) The talks are especially relevant for India, where BusinessLine reported urea stocks at 54.22 lakh tonnes on April 1, the lowest opening level in four years ahead of the kharif sowing season. The same report said India had decided to import 2.5 million tonnes of urea from suppliers including Indonesia and Malaysia. (thehindubusinessline.com, (thehindubusinessline.com) For Indonesia, the immediate question is how much of that surplus turns into signed contracts. For buyers from India to Brazil, the answer will shape fertilizer costs just as planting decisions are being made. (en.antaranews.com, (thehindubusinessline.com))