Recent rainfall in Thailand has yet to prompt a rise in urea demand, with buyers waiting for the delayed monsoon towards the end of the month, while distributors have cut prices in a bid to clear stocks after an import surge in the first quarter.
The rains have arrived in Thailand after a period of dry weather from mid-April and distributors are anticipating an uptick in demand from local buyers, probably in June after the onset of the monsoon. But current rainfall has yet to translate into a rise in purchases.
Distributors have cut retail prices by 300-500 baht/t ($8-14/t) in an attempt to reduce inventories of higher-priced product from March-April.
Prices for urea in branded 50kg bags are around Bt15,000/t equivalent, with ex-warehouse levels down to around Bt13,000/t. Indications for imports have slipped to $310-320/t cfr, with Middle East product at the low end and southeast Asian material at the high.
Urea imports soared to 722,000t in January-March, an 84pc rise on the year, with importers jumping back into the market as international prices rose from a bottom at the end of December. Thai imports averaged 331,000t in January-March 2021-23.
The rainy season is expected to begin in the week starting 27 May, one to two weeks later than in a normal year, according to the country's meteorological agency. The rainfall forecast is expected to be close to normal and similar to 2023. But rainfall in the second half of the rainy season, August to the end of October, is projected to be 5pc higher than in a typical year.
Thailand is one of the largest urea destination markets, usually receiving 2.2mn-2.5mn t/yr, offering producers a key outlet towards the end of the second quarter. Imports typically peak in May-July ahead of the monsoon season, which runs to October.
