According to an analyst, around half a million metric tons of Urea are stuck at Chinese ports after China restricted exports of the fertiliser following a price surge.
One should know that China is the world’s largest producer of Urea. India imports around 30% of Urea annually and China was its largest producer last year.
According to the report, 2 state-owned Chinese Urea producers will prioritise domestic supply to keep the prices cheaper for the Chinese.
It is said that Indian Potash Limited has bought around half a million metric tons of Urea and it is currently being held at the Chinese port of Tianjin, awaiting inspections and clearance.
According to Reuters, there has been an extraordinary delay in the loading process because of inspections.
Ju said, RCF that is Rashtriya Chemicals and Fertilizers Limited may also struggle to get large purchases of over one million tons in the recently issued tender.
There is a heavy demand of Urea in India.
On the ZCE, Urea futures reached $353.84 per ton on September 1. It is the highest level since March.
CNAMPGC Holding Ltd, one of China’s top fertiliser exporters said that they will decrease exports to make sure to control the domestic supply and prices.
State-owned China National Offshore Oil Company (CNOOC) has also asked its subsidiaries to ensure the Urea supply in the domestic market, according to Reuters.
However, we have different suppliers as well like Oman, Saudi Arabia, Egypt, and Russia.
We have to see how the stock prices of RCF will react in Monday’s trading session. Today, it closed at 126.40 INR, down 1.86%.
I think this could prove to be negative for the stock price in the short term. So, let’s see, how the price goes on Monday. However, it has given good returns in the last 30 days.
Read: NSE IS SET TO LAUNCH OPTIONS ON WTI CRUDE OIL, NATURAL GAS FUTURES
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