India clarifies and says Chinese urea acceptable via traders in tender

Author: Deepika Thapliyal

2020/07/28

LONDON (ICIS)--Indian state-run fertilizer importer MMTC Limited has issued a revised addendum to its 30 July urea tender and removed a clause that did not allow traders to offer Chinese urea without registering with the relevant Indian authorities.

Chinese companies still need to register with the Department for Promotion of Industry and Internal Trade (DPIIT) before offering in any tenders in India, according to the revised addendum from MMTC.

MMTC today removed a clause that required subcontractors of Chinese product to register with the DPIIT. This will allow non-Chinese traders to offer Chinese urea in the tender, without needing to register with the DPIIT.

On 23 July, the Indian government barred companies from nations that it  ‘shares a land border’ from bidding for government tenders and projects until they registered with DPIIT.

The move was aimed at China because all other countries that share a border with India receive lines of credit or development assistance was exempted.

It comes as India and China hold talks to defuse a deadly border clash in Ladakh between their troops on 15 June.

MMTC will close an import tender for an unspecified quantity of prilled and granular urea on 30 July. Shipments are due by 3 September.

"It is still going to be tricky for traders to offer Chinese urea (in India)," said a trader based in southeast Asia.

Another trader differed, and said, "Look at the sales in India. They need the cargoes. They will take Chinese."

International urea prices have increased $3-17/tonne following news that India had an issue with buying Chinese urea.

India is short of urea because of a bumper domestic season. It is forecast to need at least 2m tonnes of imports over the next two to three months.

This has raised concerns about a possible urea shortage and food security if China, a key urea supplier to India, is not allowed to participate in Indian tenders.

In 2019, India imported 3.2m tonnes of urea from China, 2.4m tonnes of DAP and 610,000 tonnes of sulphuric acid, according to the ICIS Demand and Supply database.