India Fertiliser Crisis: How India Fertiliser Crisis Deepens Amid Iran War and Supply Shocks

India Fertiliser Crisis Latest News

• India is facing a sharp rise in fertiliser prices due to supply disruptions triggered by the US–Israel–Iran conflict and the closure of the Strait of Hormuz, a key global energy and trade route.
• India’s latest urea import tender by Indian Potash Limited saw prices rise to $935–959 per tonne, nearly double the $508–512 per tonne recorded in February by Rashtriya Chemicals and Fertilizers.

Price Rise Across Key Fertilisers

• DAP (Di-Ammonium Phosphate): Increased from ~$680–720 to ~$865–925 per tonne. 
• Sulphur: Jumped from ~$300–550 to ~$900 per tonne. 
• Ammonia: Rose from ~$435 to ~$850–900 per tonne. 
• The surge affects both finished fertilisers and key raw materials, amplifying overall cost pressures.

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Supply Chain Disruptions

• Closure of the Strait of Hormuz has restricted global shipments.
• Shutdown of facilities by QatarEnergy and Maaden due to Iranian strikes has reduced supply.
• India is now sourcing from alternative markets like Indonesia, Malaysia, Morocco, and Jordan.
• However, new suppliers must cater to multiple regions, including South America. This has increased competition for limited supplies, further pushing up prices.

Kharif Season Fertiliser Challenge in India Amid Supply Disruptions

• The upcoming kharif season, beginning with the southwest monsoon in June, faces a serious fertiliser supply challenge, particularly for urea.
• During this season:
  • Estimated kharif requirement: 19.4 million tonnes (mt)
  • Available stock (early April): ~5.5 mt
  • This indicates a significant shortfall ahead of peak sowing season.

Dependence on Imports and Gulf Region

• India’s annual urea consumption: 39–40 mt 
  • Domestic production: 30–31 mt 
  • Imports: 9–10 mt 
• Pre-war, ~40% imports came from Gulf Cooperation Council (GCC) countries. 
• Over 60% of LNG (key input for urea production) sourced from the Gulf. 
• Disruptions in the Gulf region have directly impacted both imports and domestic production.

Impact on Domestic Production

• Normal monthly production: ~2.5 mt 
  • March output: ~1.5 mt 
  • April expected: ~1.7–1.8 mt 
• Recovery to normal levels unlikely before June. 
• LNG supply disruptions have reduced production capacity.

Logistical and Import Constraints

• Shipment delays due to vessels being stuck near the Persian Gulf and Strait of Hormuz.
• Deadlines for cargo loading extended due to availability and transit issues.
• Both imports and transportation bottlenecks are worsening supply shortages.

Relative Position of Other Fertilisers

• Better availability for: 
  • DAP (Di-Ammonium Phosphate) 
  • MOP (Muriate of Potash) 
  • SSP (Single Super Phosphate) 
  • Complex fertilisers (NPKS-based) 
• The urea shortage remains the most critical concern.

Outlook: Kharif vs Rabi

• Kharif season may be managed with difficulty 
• Greater risk lies in the rabi season, where shortages could intensify

Addressing India’s Fertiliser Crisis: Alternatives and Policy Options

• India’s fertiliser use is heavily skewed toward a few key products:
  • Urea: ~55% share of total consumption (70–71 mt annually) 
  • DAP (Di-Ammonium Phosphate): ~9–9.5 mt 
  • NPKS Complex Fertilisers: ~14.2 mt 
  • SSP (Single Super Phosphate): ~5–5.5 mt 
• This dependence makes the system vulnerable to disruptions, especially in urea and DAP.

Shift Toward Alternative Fertilisers

• Supply shortages—especially of ammonia—may lead to substitution with other fertilisers, such as:
  • TSP (Triple Super Phosphate): High phosphorus (46%), no nitrogen 
  • MAP (Mono Ammonium Phosphate): Balanced N and P content 
  • SSP: Lower phosphorus but contains sulphur 
• This shift can help manage nutrient supply despite shortages.

Proposal: Fortified Fertilisers

• Industry stakeholders suggest:
  • Coating urea or DAP with micronutrients (zinc, iron, boron, etc.) 
  • Adding secondary nutrients (sulphur, calcium, magnesium) 
  • Relaxing price controls on such fortified products 
• Benefits:
  • Improved crop yields and nutrient efficiency 
  • Reduced need for separate micronutrient application 
  • Greater value for farmers despite higher prices

Role of Biostimulants in Reducing Fertiliser Dependence

• Biostimulants are emerging as a sustainable alternative:
  • Derived from microbes, seaweed, and organic matter 
  • Do not supply nutrients directly but enhance nutrient uptake and efficiency 
• Example: Phosphate-solubilising bacteria convert locked soil phosphorus into usable forms.

Improving Nutrient Use Efficiency

• Fertilisers often have limited absorption by plants.
• Biostimulants improve: 
  • Nutrient availability in soil 
  • Conversion into plant biomass and yield 
• Can be blended with chemical fertilisers to reduce overall consumption.

Conclusion

• The fertiliser crisis may accelerate a shift toward diversification, innovation, and efficiency, with alternatives like fortified fertilisers and biostimulants helping India reduce dependence on traditional inputs while sustaining agricultural productivity.

Source: IE