<article><p class="lead">Indonesia's urea exports fell by 14pc on the year to 1.8mn t in 2022, as weaker demand from southeast Asia outweighed exports to Australia and India. </p><p>Australia remained the top export destination for Indonesian urea in 2022, with exports rising by 29pc on the year to 373,000t, latest trade data show. Higher netbacks from Australian buyers compared to other regional markets led to more Indonesian urea being diverted to Australia. India was the second-largest export destination, with exports doubling to 313,000t compared to the previous year as India increased its overall urea purchases by 1.4mn t on the year in 2022. In addition, Chinese export restrictions on urea had curbed export availability to India, resulting in traders sourcing for alternative supplies to India. </p><p>But Indonesia's urea exports to southeast Asia fell in 2022, as price volatility in the urea markets led to more cautious buying among southeast Asian importers that faced lower affordability levels among their domestic buyers. Shipments to the Philippines and Malaysia fell by 32pc and 30pc on the year to 204,000t, and 66,200t, respectively. Exports to Vietnam also declined sharply by 72pc to 59,900t, while those to Thailand plunged by 66pc to 47,000t. Exports to Myanmar also fell by 60pc on the year to 38,000t, as importers in Myanmar turned to purchasing amsul as a cheaper alternative. </p><p>Exports to southeast Asia fell sharply in 2022 as firmer year-on-year delivered prices to the region led to demand destruction, resulting in southeast Asian importers keeping their purchases to a minimum because of weak domestic consumption. Another factor was the sharp declines in southeast Asian urea export prices in the first quarter of the year, caused by international urea supply outstripping demand. It was more profitable for Indonesian producers to sell to domestic markets instead of exporting to the region. </p><p>Pupuk Indonesia's export availability was curbed in certain months of 2022. The producer focused on catering to the domestic market in the first two months of last year, resulting in lower year-on-year volumes being exported. Export availability was also tight in August when the Kaltim V granular plant went off line following an explosion. </p><p>Exports in December totalled 40,400t, down by 25pc from the previous year because of reduced shipments to India, which accounted for 12,400t compared with 44,000t a year earlier. The fall in December exports was partially mitigated by shipments to the Philippines and Malaysia, which took 11,700t and 7,100t, respectively, against zero a year earlier. </p><p>Indonesia's urea exports are likely to remain low in the first quarter of 2023 as producers focus on supplying to the domestic market. Reduced export availability from Pupuk Indonesia, which received an export license for 1mn t of urea in 2023 — slightly lower than previous years — will likely weigh on exports as well.</p><p class="bylines">By Dinise Chng </p></article>
