OMIFCO signs key pact to supply urea to India

MUSCAT: Oman India Fertiliser Company (OMIFCO), which recently completed one of the largest initial public offerings (IPOs) on the Muscat Stock Exchange (MSX), has confirmed that its principal trading partner, OQ Trading Limited, has signed a back-to-back agreement with the Government of India to supply urea under a long-term offtake arrangement.
The agreement, signed on July 9, 2026, activates a key component of the revised urea marketing framework disclosed in OMIFCO's IPO prospectus and will come into effect on August 1, 2026, remaining valid until February 20, 2031.
Under the arrangement, 50 per cent of the urea purchased by OQ Trading from OMIFCO will be supplied to the Government of India, providing long-term certainty for a significant portion of the company's export volumes.
The announcement follows OMIFCO's successful public listing on the MSX after an IPO that saw 25 per cent of the company offered to investors, attracting exceptionally strong demand with the offering reported to have been around 18 times oversubscribed. The listing marked a major milestone in Oman’s capital market development and broadened public participation in one of the country's largest industrial exporters.
In a disclosure to investors on July 16, OMIFCO said the execution of the agreement is fully consistent with the arrangements outlined in its prospectus dated June 11, 2026.
The latest agreement stems from a binding term sheet signed between OMIFCO and OQ Trading on April 9, 2026, with retrospective effect from February 21, 2026, establishing a new urea offtake framework that replaces the previous marketing arrangement between the two companies.
Under the revised agreement, OQ Trading will continue to purchase 100 per cent of OMIFCO's exported urea production, excluding domestic sales, representing approximately 2 million metric tonnes per annum (mtpa). Annual offtake volumes will be agreed during the fourth quarter each year and will take effect from January 1 of the following year.
Urea will continue to be supplied on a free-on-board (FOB) basis at OMIFCO's export jetty, with ownership and risk transferring to OQ Trading upon vessel loading.
The agreement also formalises the dedicated supply commitment to India. Subject to annual production reaching at least 2 million mtpa, approximately 1 million tonnes of urea annually will be allocated to the Government of India through OQ Trading. Should production fall below that level in any calendar year, deliveries to India will be reduced proportionately on a 50 per cent basis.
Pricing under the new offtake arrangement will continue to be linked to prevailing international market benchmarks. Urea sold by OMIFCO to OQ Trading will be priced at a discount of between 3.0 per cent and 3.5 per cent to selected Middle East free-on-board netback indices. Volumes destined for the Government of India will instead be priced against a dedicated India-specific benchmark based on the average Middle East FOB non-US netback index over the two weeks preceding the bill of lading date.
The agreement reinforces OMIFCO's long-standing role as a strategic supplier of fertiliser to India while providing greater visibility over export volumes and marketing arrangements following its transition to a publicly listed company.