Urea import is needed to meet the demand-supply gap.

As per the latest data compiled by NFDC, in Oct’22, Urea offtakes declined by 16%YoY/15%MoM to 430k tons.

The Rabi 2022-23 season started with an opening inventory of 294k tons of urea. The total availability of urea would be around 3,494k tons comprising of 2,937k tons domestic production and 263k tons of imported supply.

Urea offtake during Rabi 2022-23 is estimated to be around 3,259k tons leaving behind a closing inventory of 249k tons at the end of the Rabi season. Closing inventory of urea from Dec’22 to Feb’23 is expected to remain below 200k tons, reflecting a tight situation regarding its availability at dealer price.

Government should ensure the operation of LNG-based urea plants till 31st December 2022 and scheduled imports of 160k tons of urea (35k tons must be available in the first week of Dec’22 and 125k tons in the first week of January 2023) on fast track basis to combat the shortage.

Courtesy – Spectrum Research

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