Importance and Current Status of Fertilizer Supply in India

Fertilizers provide essential nutrients like nitrogen (N), phosphorous (P), potassium (K), and sulphur (S) to crops. India's self-sufficiency in food production does not extend to fertilizers, creating a heavy reliance on imports.

Projected Import and Production (2025-26)

• India expects to import nearly: 
  • 10 million tonnes of urea
  • 6.5 million tonnes of di-ammonium phosphate (DAP)
• Domestic production is estimated at: 
  • 30 million tonnes of urea
  • 3.5 million tonnes of DAP
• Entire 3 million tonnes of muriate of potash (MOP) will be imported.
• Domestic production of complex fertilizers is likely to be 12.5 million tonnes with 4 million tonnes imported.

Dependence on GCC and Other Regions

• GCC Countries (Oman, Qatar, Saudi Arabia, UAE, Bahrain) account for 75% of urea imports.
• Saudi Arabia is the largest source for DAP imports.
• MOP is mainly sourced from other West Asian countries like Jordan and Israel.

Geopolitical Vulnerabilities

India's agriculture and food security are impacted by geopolitical tensions, particularly involving the US-Israel-Iran conflict and the Russia-Ukraine war.

• Russia: 
  • Top supplier of MOP
  • Third largest supplier of urea and DAP
• China was a leading source for urea and DAP until 2023-24.

Natural Gas and Feedstock Importation

• 29% of India's natural gas consumption is for fertilizers.
• More than half of the natural gas requirement is imported, with major imports from Qatar, UAE, and Oman.

Challenges and Alternatives in Phosphate and Sulphur Importation

• India lacks mineable reserves for rock phosphate (P), potash (K), and sulphur (S).
• Major import sources include Jordan, Senegal, Morocco, China, Tunisia, Oman, UAE, and Saudi Arabia.
• Ammonia imports majorly from Oman, Saudi Arabia, Qatar.

Impact of Global Conflicts

• Disruption in Russian exports due to the war and damage to logistics like pipelines.
• Increased sulphur prices from $250 to $550 per tonne due to supply disruptions.

Domestic Stock and Future Outlook

• Comfortable stock levels as of February-end for urea, DAP, and complex fertilizers.
• Increased imports from non-traditional suppliers like Indonesia, Malaysia, Egypt, and Finland.

Potential Future Challenges

• Possibility of a prolonged war affecting supply routes and logistics.
• Need for alternative supplier strategies for LNG and ammonia if routes through the Strait of Hormuz close.
• Potential government prioritization in natural gas allocations to support fertilizers and city gas distribution.