Ample fertilizer stocks cushion India against war-driven supply risks

Despite renewed conflict in West Asia disrupting shipping routes and driving up global fertilizer prices, India has sufficient stocks for the ongoing kharif season, with supplies comfortably exceeding demand.

Between 1 April and 21 July, the availability of urea, di-ammonium phosphate (DAP), muriate of potash (MOP) and complex fertilizers totalled 30.65 million tonnes (mt), against an estimated seasonal requirement of 20.43 mt, according to fertilizer ministry data reviewed by Mint.

According to the ministry, urea availability stood at 16.6 mt against a requirement of 11.2 mt during 1 April-21 July. DAP availability reached 4.02 mt against a seasonal requirement of 3.2 mt, and MOP availability was 1.4 mt compared with a requirement of 1.0 mt. Complex fertilizers also remained adequately stocked, with NPKS availability at 8.5 mt against a requirement of 4.95 mt.

The comfortable inventories come at a critical time for India, the world’s largest urea importer and the second-largest fertilizer consumer, as freight costs rise and shipping through key trade routes remains disrupted by the conflict in West Asia.

India relies on imports for around 60% of its DAP requirement and roughly 15% of its urea and NPK (nitrogen, phosphorus, and potassium) demand, leaving it exposed to global supply disruptions and price swings.

To reduce these risks, the Centre has diversified fertilizer sourcing through diplomatic and strategic efforts. Urea is now imported from countries including Oman, Malaysia, Vietnam, Nigeria, Russia, Egypt and Algeria, while DAP and NPK supplies have been secured from Russia, Morocco, Egypt, the US, Jordan and Saudi Arabia through the Red Sea route.

As of 10 June, India has secured around 2.5 mt of urea, 1.5 mt DAP and 1.0 mt NPKs from different countries. The government also floated a global tender on 27 May to procure 1.7 mt urea.

Meanwhile, India has trimmed its fertilizer demand estimate for the ongoing kharif season to 38.39 million tonnes from 39.05 million tonnes. after the weather office cut its monsoon forecast, reflecting expectations of slower sowing and lower nutrient consumption.

“The slight reduction in fertilizer demand reflects weaker rainfall expectations rather than any structural decline in agricultural activity,” said Amritpreet Kaur Minhas, fellow at research organisation The Energy and Resources Institute (TERI). Farmers may shift to other alternatives like nano fertilizers and bio-fertilizers, Minhas added.

“In the current season, fertilizer demand has been largely unchanged over the previous season and with the sowing levels facing headwinds, the fertilizer demand is not expected to rise materially,” said Varun Gogia, vice president & sector head, Icra Ltd.

The Centre said it is assessing demand on a state-wise basis every month to avoid shortages during the peak sowing period. Based on this assessment, the Department of Fertilizers prepares supply plans and monitors availability nationwide, it said in response to an email query.

It added that movement of subsidised fertilizers is tracked through the Integrated Fertilizer Management System (iFMS), while the direct benefit transfer (DBT) system ensures subsidies are released to companies only after Aadhaar-authenticated sales to farmers.

“Diversifying fertilizer import sources is essential, much like the strategy adopted in the energy sector. Overdependence on a single region exposes the country to geopolitical and price risks,” said Sankalp Gurjar, assistant professor of geopolitics at Gokhale Institute of Politics and Economics, Pune. “Diversification will reduce our dependence on West Asia and at the same time secure our demand.”

Domestic production has also strengthened after natural gas supplies to fertilizer plants were restored to full capacity. India produced 7.15 mt of urea during April-June, exceeding its quarterly target by 369,000 tonnes. DAP production rose to 984,000 tonnes, above the target of 861,000 tonnes, while NPK and SSP output remained robust at 2.07 mt and 1.35 mt, respectively.

“The government has been quite proactive in ensuring adequate fertilizer supplies. While there may be some concerns around DAP, imports and domestic production have largely remained on track, and inventories are comfortable,” said Dr. Sachchida Nand, visiting professor at the Indian Council for Research on International Economic Relations (ICRIER).

India continues to source DAP from multiple countries and the immediate supply situation is stable, “but we need to keep a close watch on global prices, particularly for phosphatic fertilizers, which remain elevated,” he added.

The Centre has budgeted ₹1.77 trillion towards fertilizer subsidies for FY27. India’s fertilizer subsidy bill crossed ₹2.17 trillion in FY26.