India's fertilizer supplies under strain as war disrupts shipments

Hind Al Soulia - Riyadh - NEW DELHI — India's fertilizer supplies are under pressure after disruptions to shipping routes due to the war in the Middle East, raising concerns about lower farm produce and higher food prices.

India, the world's second-largest fertilizer user after China, depends heavily on imports of both raw materials and finished products — much of which comes from the Gulf, passing through the Strait of Hormuz.

Prime Minister Narendra Modi has said his government has taken measures to ensure fertilizer supplies are not affected and to protect farmers from any impact.

Analysts say current stocks are enough for the upcoming sowing season, but this may change if the war stretches on.

Nitrogen fertilizers such as urea, the most widely used in India, are crucial for farmers because many major food crops, including rice and wheat, cannot absorb adequate nitrogen directly from the air.

India uses nearly 40 million tons of urea annually, supported by government subsidies, and supply disruptions could affect planting decisions.

Farmers in northern states of Punjab and Haryana which are major grain-producing regions, say they are not yet feeling the stress as the key sowing season (June-July) approaches. They typically start buying urea for this season from May.

Currently, supplies are available through farmer cooperatives as well as warehouses run by manufacturers and distributors, but there are worries about the future.

"We don't know how long the stock will last if the war stretches any further," said Manpreet Singh Grewal, president of a farmers' collective linked to Punjab Agricultural University.

India had urea stocks of about 6.2 million tons as of 19 March, according to government data.

Fertilizer use peaks during the June-to-September monsoon crop season, which analysts say the current stocks should be able to support under normal conditions.

Some experts warn that the situation could worsen if disruptions continue.

India's fertilizer production is "surely going to be impacted" because of the disruption, Siraj Hussain, a former federal secretary of agriculture and farmers' welfare in India, told the BBC.

"The government should be preparing for a shortage of urea and other fertilizers for the monsoon harvest."

Executives at two fertilizer companies, who did not want to be identified, told the BBC that shortages could emerge later in the season if the conflict continues - though the timing and scale would depend on how long supply disruptions persist.

Natural gas is the main raw material used to make urea and India imports about 85% of it, mostly from the Gulf region.

Fertilizer plants in India are getting only around 70% of their gas needs currently, following a government order issued earlier this month. Industry insiders say this has led to some manufacturers cutting production.

Global fertilizer prices have risen sharply in recent weeks, with urea prices climbing and gas prices across Asia increasing.

Modi has said India has taken steps to increase domestic fertilizer production and diversify import sources to reduce reliance on a few countries.

On Wednesday, Agriculture Minister Shivraj Singh Chouhan asked officials to ensure an equitable and uninterrupted supply of fertilizers.

India has a diversified approach to fertilizer imports, foreign ministry spokesperson Randhir Jaiswal said, adding: "We continue to remain in touch with several countries in that regard."

India is holding talks to increase purchases from Russia, Belarus and Morocco ahead of the summer planting season, according to industry sources.

Although Indian companies import fertilisers individually to meet their own requirements, they negotiate collectively with overseas suppliers, as the sector is highly regulated and the government subsidises retail sales to farmers. — Agencies