Explained: The scramble for fertilisers

The country on the whole received 8.9% above the long-period average rainfall in June, 4.8% in July and 5.5% in August. Even May, technically a month preceding the monsoon season that extends from June to September, recorded a whopping 106.4% above-normal precipitation.

In terms of geographical spread, 33 out of the country’s 36 meteorological subdivisions have registered normal rainfall. Rains have been deficient – below 80% of the normal for the June-August period – only in Bihar, Assam & Meghalaya, and Arunachal Pradesh.

The monsoon’s timely arrival and progress has resulted in farmers planting more area under kharif crops this year. As on August 22, they had sown 420.4 lakh hectares (lt) under rice, 7.6% up over the 390.8 lh for the corresponding period (from June) last year. The other crop to have posted a notable acreage jump, from 83.6 lh to 93.3 lh or 11.7%, is maize.

Fertiliser sale impact

When the monsoon is good – rains ensure adequate soil moisture, apart from filling up reservoirs and recharging groundwater tables – farmers not only plant with gusto, reflected in higher acreages. They also buy more fertilisers supplying nutrients – such as nitrogen (N), phosphorus (P), potassium (K) and sulphur (S) – that are as essential for plant growth as water and sunlight.

Table 1

Table 1 shows double-digit growth in sales of most fertilisers during April-July 2025 over April-July 2024. That includes urea, single super phosphate (SSP), muriate of potash (MOP) and complex fertilisers containing N, P, K and S in different combinations.

The only fertiliser whose sales have dipped, by 12.8%, is diammonium phosphate (DAP). But this seems part of a general trend from the last couple of years, wherein a shortage of DAP has led farmers to substitute it with other P-containing fertilisers like 20:20:0:13 and SSP.

Sales of 20:20:0:13 – its 20% P content is below DAP’s 46%, though above SSP’s 16% – touched an all-time-high of 69.7 lakh tonnes (lt) in 2024-25, making it India’s third largest selling fertiliser after urea (387.7 lt) and DAP (92.8 lt).

Overall, this season has witnessed buoyant sales of fertilisers, on the back of strong monsoon-induced demand, and continued replacement of DAP by complexes (especially 20:20:0:13) and SSP. The latter represents a move towards more balanced fertilisation. 20:20:0:13 and SSP have 13% and 11% S content respectively, in addition to P. On the other hand, DAP has 46% P and no S.

Supply shortfalls

While fertiliser demand has substantially gone up, there has been no commensurate supply increase.

Domestic production of urea during April-July 2025, at 93.6 lt, was lower than the 102.1 lt of April-July 2024. DAP output was flat at 13.7 lt, while up for NPKS complexes (from 35 lt to 37.4 lt) and SSP (from 17.1 lt to 19.1 lt). In the case of urea and DAP, there has been a decline in imports as well.

With demand outpacing supply, it has caused a sharp depletion in stocks of major fertilisers in the country. According to government data, urea stocks on August 1, at 37.2 lt, were lower than the 86.4 lt for the same day of 2024. So were that of DAP (13.9 lt versus 15.8 lt), complexes (35 lt versus 47 lt) and MOP (6.3 lt versus 8 lt). Only SSP stocks were marginally higher (20.7 lt versus 20.1 lt).

The effects of supply shortfalls were truly felt in July-August, which are the peak consumption months for kharif crops.

Farmers apply DAP and other phosphatic fertilisers at the time of sowing along with the seeds, as crops need P for proper root establishment and early plant growth. The application of urea (which has 46% N) comes a little later: For rice, it is in split doses – the first after 8-10 days of transplanting, the second after 25-30 days and a third after 45-50 days.

Figures in Lakh tonnes *Includes other countries (Source: Department of Commerce)

Given this pattern of consumption, it’s not surprising that news reports and videos of farmers standing in serpentine queues to procure their bare minimum requirement of urea bags were in wide circulation from late-July. “By then, the fear factor also set in, with many farmers buying to pre-stock and not just to meet current crop requirements. That further amplified the actual extent of shortage,” said G. Ravi Prasad, a fertiliser industry veteran.

Policy lessons

The government probably underestimated the increased demand for fertilisers during this kharif, particularly on account of rice and maize.

Both these are high nitrogen-consuming crops requiring three bags or more of urea per acre. This is unlike soyabean and pulses, which are naturally nitrogen-fixing and require hardly a bag of urea as a basal dose. As farmers expanded rice and maize acreages, while simultaneously planting less under soyabean and pulses, it has translated into additional demand.

With the peak fertiliser consumption period for kharif over, the government will now have to plan supplies for the upcoming rabi winter-spring cropping season.

Given that India’s 161 major reservoirs are currently filled to nearly 83.5% of full storage capacity, on top of replenished underground aquifers, one can expect fertiliser demand to be strong during rabi too. That would call for stocking up well in advance.

Imports of both urea and DAP have been falling after 2023-24, primarily due to a supply squeeze by China (see Table 2(a) and (b)). That should hopefully ease with the recent rapprochement between the two countries.

“We must also look at ways to cap, if not cut, urea and DAP consumption. For instance, farmers can replace at least one bag of urea with ammonium sulphate having 20.5% N and 23% S content. The government can, likewise, restrict DAP use only to paddy and wheat, while promoting complexes for other crops,” added Ravi Prasad.