India urea import prices drop 12% as war-driven supply fears ease

India paid as much as $959 a tonne for supplies in April, nearly double pre-war levels. Prices crashed to less than half for its June tender as supplies eased and global demand weakened. A fertilizer ministry spokesperson didn't immediately reply to an email seeking comment sent after office hours.

Vessel traffic through the Strait of Hormuz, a key conduit for global fertilizer trade, has held well below normal since the war broke out in February, disrupting supplies and driving prices higher. Peace talks between the US and Iran remain stalled, with both sides claiming control of the crucial waterway.

The lower import costs could ease the burden on India's fertilizer subsidy bill, which had ballooned as global prices surged. Domestic farmers, who depend on subsidized urea, are unlikely to see an immediate price change at the retail level. The government's fiscal position stands to benefit from the cheaper imports. For stock market analysis of fertilizer companies, the softer pricing signals margin pressure on domestic producers like Chambal Fertilizers and Coromandel International, which compete with imports. The June tender's lower prices already forced some domestic plants to cut output. If global supply continues to loosen, the import parity price – the benchmark for domestic urea pricing – could fall further, squeezing local manufacturers who rely on costlier natural gas feedstock.