Indonesia urea doubles to $738/t on China absence

04 June 2008 11:12  [Source: ICIS news]

LONDON (ICIS news)--State-owned urea fertilizer company Pupuk Iskandar Muda (PIM) sold prilled urea at $738/tonne (€480/tonne), more than double the level achieved in the last Indonesian sales tender, traders said on Wednesday.

PIM closed its sales tender on 4 June for 2 x 20,000 tonnes of prilled urea. The highest bidder, trading company Youngwoo, was awarded 20,000 tonnes at $738/tonne FOB (free on board).

This will be shipped between mid-June and early July.

No further awards were made, because, traders suggested, no other company was willing to match the Youngwoo price.

The next highest was trading company Liven, which bid at $718/tonne FOB.

At the last Indonesian export sales tender in November 2007 the highest bid came in at $350.50/tonne FOB, which shows that Indonesian prices have more than doubled since then.

Strong international demand and tight supply due to the absence of China from the export arena are the main causes of this dramatic price increase.

Moreover, traders said that only PIM would be permitted to export out of Indonesia this year, as the other four producers were fully committed in the domestic market.

($1 = €0.65)

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By: Carl Roache
+44 20 8652 3214

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