How India prevented major fertiliser shortages despite West Asia war, and the concerns now

Domestic urea output recovered to 21 lt in April. The next two months saw it further rise to 25.2 lt and 25.4 lt, so much so that cumulative production in April-June 2026, at 71.5 lt, was 5.4% higher than the 67.9 lt for the same quarter last year.

Proactive government action

“The credit goes to the government, which pushed GAIL (India) Ltd and Indian Oil Corporation to diversify their LNG sourcing, even if it meant pivoting heavily to spot market purchases at higher prices. So, even as the share of Qatar and UAE dwindled to near-zero, more LNG was imported from the US, Oman, Nigeria, Angola, the People’s Republic of the Congo and even Indonesia, Trinidad and Norway,” a fertiliser industry official said.

The same proactiveness was also seen in urea imports. The state-owned Indian Potash Ltd (IPL) and National Fertilizers Ltd floated tenders on April 4 and May 27, against which 25 lt and 17 lt of imported urea were secured at landed prices of $935-959 and $444.9-449.3 per tonne, respectively.

A third tender for the import of 17 lt — with 10 lt to be delivered in western Indian and 7 lt in eastern coast ports — was issued by Rashtriya Chemicals and Fertilizers on July 29. The bids for this tender will open on August 11.

On the whole, India imported 25.1 lt of urea during April-June 2026, up from a mere 8.4 lt in April-June 2025. “Through this crisis, the government has made sure there is adequate supply of both imported urea and LNG for domestic production. It has also not allowed the higher import costs to be passed on to farmers, which would reflect in the fertiliser subsidy bill overshooting budget estimates,” the official noted.

Not so comfortable

While the urea supply situation is comfortable, it’s not so with di-ammonium phosphate (DAP) and complex fertilisers.

Urea meets the nitrogen (N) requirement of crops, just as DAP and muriate of potash (MOP) provide P and potassium (K) respectively. Complex fertilisers contain these plant nutrients — N, P, K and sulphur (S) — in different blends.

It can be seen from the accompanying table that the production of DAP, complex fertilisers and also single super phosphate (SSP, a low P-content substitute for DAP) have registered declines in April-June 2026 over April-June 2025. Moreover, unlike in urea, their reduced domestic output has been combined with lower imports.

Table.

The success achieved in widening the import sources of urea and LNG has not been replicated either in phosphatic and complex fertilisers or key intermediates/raw materials such as phosphoric acid and sulphur.

Prices of phosphoric acid (cost plus freight) imported into India have increased from $1,055 per tonne in January-March 2025 to $1,153 in April-June 2025, $1,258 in July-December 2025, $1,290 in January-March 2026, $1,360 in April-June 2026 and $1,700 for the current July-September 2026 quarter.

It’s worse for sulphur, where landed prices were elevated at $500-550 per tonne (as against the normal $150-250 range) even before the Iran war. That spike was on account of Ukrainian drone attacks on oil refineries in Russia, which led to production losses and a ban on exports by a major global supplier.

The conflict in West Asia has tightened sulphur supplies from other big sources too: QatarEnergy, Saudi Aramco, Abu Dhabi National Oil Company and Iran itself. The result is that import prices are ruling at around $1,100 per tonne now.

The conflict has also squeezed the supply of ammonia — the source of N for complex fertilisers — from QatarEnergy, Saudi Arabia’s Maaden and SABIC, and Iran. These were, again, previously being shipped through the Strait of Hormuz. Import prices of ammonia have eased to $650-700 per tonne though, after skyrocketing to $850-900 levels in May.

“The real problem today is sulphur. It is necessary for making sulphuric acid that is, in turn, used to break down rock phosphate (the P-bearing ore) and convert into phosphoric acid. And without phosphoric acid and sulphuric acid, there can be no DAP, SSP and complex fertilisers,” the official quoted earlier explained.

In DAP, no imports have been contracted after the purchase of 13.5 lt through IPL’s mega-tender on April 28 at $930-935 per tonne (cost plus freight). That price was higher than the $725-750 levels of a year ago.

“Prices are unlikely to fall. In anything, they may go up if India were to float a fresh large import tender. The government must focus on augmenting supply of sulphur and make it viable for domestic DAP and NPKS manufacturers to import. It would entail making additional subsidy provision, similar to that on urea,” the official added.

El Niño factor

Supply-side management apart, demand for fertilisers has been subdued because of the El Niño-induced monsoon rainfall deficiency.

With all-India rainfall during June-July being 12.6% below the normal average for the two months, the area sown under kharif crops, too, has been 4.7% down so far relative to last year’s corresponding coverage.

This is in contrast to 2025 and 2024, which were surplus monsoon years. Ample soil moisture, well-filled reservoirs and recharged groundwater tables prompted farmers to plant with gusto and also queue up to buy fertilisers. With supply management failing to keep pace with demand, there was a scramble for fertilisers, and the lines only got longer.

This time, there has been a slowdown in the offtake of fertilisers, besides better supply preparedness on the government’s part. Contrary to fears — and Iran notwithstanding — no significant shortages of fertilisers have been reported in the ongoing kharif season.

“With upcoming state elections in Uttar Pradesh, Punjab and Uttarakhand in February-March, you can expect the government to take no chances at all even for the rabi (winter-spring) cropping season,” the official added.