New Delhi: India’s fertiliser supply chain is coming under increasing pressure as the ongoing conflict in the Middle East disrupts key shipping routes, raising concerns about farm productivity and potential food price inflation in the months ahead.
As the world’s second-largest fertiliser consumer after China, India relies heavily on imports of both raw materials and finished fertiliser products. A significant portion of these shipments passes through the Strait of Hormuz, a critical maritime route now affected by geopolitical tensions.
Prime Minister Narendra Modi has assured that the government is taking proactive steps to safeguard fertiliser availability and shield farmers from any immediate fallout. Officials maintain that current stock levels are sufficient for the upcoming sowing season, though uncertainty looms if disruptions persist.
Stocks stable for now but risks ahead
Government data shows India held around 6.2 million tonnes of urea as of March 19, which analysts say should meet demand during the June-to-September monsoon cropping season under normal conditions. Fertiliser demand typically peaks during this period, particularly for nitrogen-based products like urea, which is essential for crops such as rice and wheat.
Farmers in key agricultural states like Punjab and Haryana have not yet reported shortages. With the sowing season approaching, bulk purchases are expected to begin in May, leaving current supply channels, including cooperatives and private distributors functioning without major disruptions.
However, farmer groups remain cautious. Representatives warn that prolonged supply chain disruptions could lead to shortages later in the season, especially if imports slow further.
Dependence on imports raises concerns
India consumes nearly 40 million tonnes of urea annually, supported by substantial government subsidies. The country imports about 85 percent of its natural gas, the primary raw material used in urea production — largely from Gulf nations.
Recent government directives have reduced gas supply to fertiliser plants to around 70 percent of their requirements, forcing some manufacturers to scale back production. Industry experts caution that while short-term disruptions can be managed through alternative sourcing or domestic output, prolonged interruptions could significantly strain supplies.
Global ripple effects and price pressure
The issue is not limited to India. Global fertiliser prices have surged in recent weeks, with urea and natural gas costs rising across Asian markets. Analysts warn that higher input costs could push up subsidy burdens for the government while also influencing farmers’ usage patterns.
Experts note that while immediate crop yields may not see drastic declines, longer-term impacts could emerge if shortages persist. Reduced fertiliser usage, whether due to high prices or limited availability may affect future harvests.
Expectations may drive food inflation
Analysts highlight that food price movements may be shaped as much by market sentiment as by actual supply shortages. Concerns over fertiliser availability could influence pricing trends even before any tangible drop in agricultural output occurs.
The government has reiterated its focus on boosting domestic fertiliser production and diversifying import sources to reduce dependency on a limited number of suppliers. Agriculture Minister Shivraj Singh Chouhan has directed officials to ensure equitable and uninterrupted fertiliser distribution across regions.
For now, the situation remains stable, but much depends on how long the conflict continues. A quick restoration of normal shipping operations could ease pressure on supply chains, while prolonged disruption may pose deeper challenges for India’s agricultural sector and food security.
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