1 10/27/2016 Marina Simonova Fertecon, United Kingdom Importance of tenders in global fertilizer trade 2 Fertecon | Agribusiness intelligence Contents ‣ Why tenders? ‣ World fertilizer tender map ‣ Market implications ‣ Geopolitics & risks ‣ Tenders by commodity ‣ India ‣ Conclusions
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Importance of tenders in global fertilizer trade · 1 10/27/2016 Marina Simonova Fertecon, United Kingdom Importance of tenders in global fertilizer trade 2 Fertecon | Agribusiness
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1
10/27/2016
Marina Simonova Fertecon, United Kingdom
Importance of tenders
in global fertilizer trade
2 Fertecon | Agribusiness intelligence
Contents
‣ Why tenders?
‣ World fertilizer tender map
‣ Market implications
‣ Geopolitics & risks
‣ Tenders by commodity
‣ India
‣ Conclusions
2
10/27/2016
3 Fertecon | Agribusiness intelligence
Getting the best price & mitigating market risks
• Best price • Diversity of supply • Testing supply availability • Know your supplier
• Best price • Identifying market balance • Transparency • Know your customer
Often establishing forward price direction
Buyer Seller
Tender
Price
Transparency
4 Fertecon | Agribusiness intelligence
Wide geography of tender-participating countries
in fertilizers & raw materials (sulphur, acid, rock)
Based on available tender data for 2014-2016
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5 Fertecon | Agribusiness intelligence
Profile of the companies issuing tenders – state-owned enterprises and government authorities play an important role
Bangladesh
BCIC (fully owned by
government) BADC
Sri Lanka
Ministry of Agriculture
India
Government-authorized companies
Sudan
Ministry of Agriculture
Belarus Russia Pakistan Nepal
Grodno Azot part of state-
owned Belneftekhim
Gazprom TCP
(administered by Ministry of Commerce)
AICL (state-owned Agricultural
Inputs Company)
6 Fertecon | Agribusiness intelligence
Tender activity & implications for international prices (UREA)
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$/t
fob China prill fob ME, excl. US market
1st tender closed 10 Apr by STC 510,000 t awarded
2nd tender closed 9 May by IPL 770,500 t awarded
3rd tender closed 19 Jun by STC 850,000 t awarded
4th ender closed 30 July by MMTC 965,000 t awarded
5th tender closed 11 Sep by IPL 784,000 t awarded
6th ender closed 9 Oct by MMTC 405,000 t awarded
7th tender closed 30 Oct by STC 761,000 t awarded
8th tender closed 28 Nov by IPL 1.3 mln t awarded
Prices started to weaken, but large Indian tender provided some support
Indian urea tenders
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7 Fertecon | Agribusiness intelligence
Tender activity & implications for traded volumes (UREA)
1st tender closed 10 Apr by STC 510,000 t awarded
2nd tender closed 9 May by IPL 770,500 t awarded
3rd tender closed 19 Jun by STC 850,000 t awarded
4th ender closed 30 July by MMTC 965,000 t awarded
5th tender closed 11 Sep by IPL 784,000 t awarded
6th ender closed 9 Oct by MMTC 405,000 t awarded
7th tender closed 30 Oct by STC 761,000 t awarded
0
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'000 t
8th tender closed 28 Nov by IPL 1.3 mln t awarded
Urea exports from China
Other origins
2%
from ME 38%
from China 60%
Urea imports in India by origin (2015)
9.9 mln t
Indian urea tenders
8 Fertecon | Agribusiness intelligence
More tender-participating countries from the higher risk ranking
Political stability index (-2.5 weak; 2.5 strong), 2014, source The World Bank