Urea into 2027: gas, Indian tenders and freight

Three variables will set urea prices into 2027: the cost of feedstock gas in the Gulf, the timing and size of India's import tenders, and handysize freight out of the Arabian Sea.

Gulf producers remain the swing suppliers to East Africa and to India's west coast. When an Indian tender falls in the same window as African seasonal demand, FOB prices react first and freight usually follows within two weeks.

Gas supply to Gulf plants is stable under long-term contracts, so production costs are unlikely to drive prices on their own. The larger risk is timing: if two or three Indian tenders are concentrated in the first quarter, available tonnage for other markets will tighten quickly.

Our fertilizer desk expects prilled and granular urea from the Gulf to trade within its current range through the first quarter, with upside risk if Indian tender volumes repeat this year's pattern. Buyers with storage should consider covering first-quarter requirements early.