Thailand’s 4Q urea imports face pressure
Thailand's fourth-quarter urea imports are largely expected to fall because of high inventories and slowing domestic demand, despite a spur in arrivals in July.
Thailand's domestic main application season usually begins in May but heavy rainfall accelerated at the end of July and slowed fertilizer application.
Continued monsoon rainfall in most regions in August has led to widespread flooding, especially in the northeast of the country, with further severe rainfall forecast for early September. Flooding has damaged rice and corn field crops in some regions and extra measures have had to be taken to drain fields.
In-season rice paddy plantings nationwide have also been affected and were less than expected at 15.04mn rai (2.4mn ha) compared with a projected 17.01mn rai. Plantings for field-crop vegetables were also projected at 540,000 rai but only hit 360,000 rai, as of 28 August, according to Thailand's Royal Irrigation Department. This has slowed overall agricultural activity and stifled domestic urea buying demand.
Urea stocks have yet to be fully liquidated for July-August, while incoming vessels of contractual shipments due to arrive in August and September further adding to inventories. Farmers and consumers are also facing reduced affordability and have refrained from purchasing more than necessary urea cargoes.
Price sentiment for rice exports has been bearish in Thailand, with July wholegrain prices dipping by around 3-7pc below June levels. Thai 100pc B white rice prices were indicated mostly around $602.70/t fob in July, down by 7pc from a month earlier, while Thai parboiled 100pc rice was indicated at $590.70/t fob and down by 5pc, according to the UN Food and Agriculture Organisation. This was despite an appreciation of the Thai baht against the US dollar and the announcement of a rice import tender from Indonesia, which typically boosts Asian rice prices and trade.
Importers are unlikely to seek any additional urea spot cargoes in this year's fourth quarter because of weaker farmer demand, instead seeking to sell existing inventories.
Thailand's urea imports in July more than doubled to 445,000t, the largest monthly intake this year. This was largely driven by anticipation of firm urea demand, as ample rainfall across most regions in June had encouraged importers to schedule contractual urea vessels for July arrival.
| Thailand urea imports (t) | |||||||
| Saudi Arabia | Oman | Malaysia | Indonesia | Brunei | Others | YTD | |
| Jan | 137,092 | 16,501 | 40,715 | 16,756 | 3,040 | 30,705 | 244,809 |
| Feb | 91,112 | 30,050 | 15,513 | 0 | 38,193 | 17,472 | 192,340 |
| Mar | 107,008 | 41,125 | 27,957 | 21,462 | 35,158 | 52,476 | 285,186 |
| Apr | 56,875 | 5,655 | 33,644 | 7,830 | 0 | 120,741 | 224,745 |
| May | 69,410 | 62,576 | 13,344 | 2,000 | 13,500 | 12,626 | 173,456 |
| Jun | 108,156 | 58,263 | 46,965 | 5,915 | 12,391 | 69,056 | 300,746 |
| Jul | 248,031 | 79,331 | 47,015 | 7,894 | 28,227 | 34,223 | 444,721 |
| Total | 817,684 | 293,501 | 225,153 | 61,857 | 130,509 | 337,299 | 1,866,003 |
| Source: GTT | |||||||
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