New Delhi: India could face disruptions in fertiliser and raw material supplies for the upcoming kharif season beginning in June if the blockade of the Strait of Hormuz continues amid the ongoing conflict in West Asia, according to industry insiders. However, they noted that there is no immediate concern as the current period is considered a lean season.
Executives in the fertiliser sector warned that any reduction in liquefied natural gas (LNG) supply to urea producers in the coming weeks could affect production levels ahead of the key planting season. Kharif crops—including rice, pulses, oilseeds, cotton, and sugarcane—account for more than half of India’s total food grain output.
Fertiliser companies typically produce around 2.5 million tonnes (MT) of nutrients each month. Industry experts said that if LNG supplies remain disrupted, production could decline significantly. Manufacturing and stockpiling generally begin in March to ensure adequate supplies for farmers during the sowing period.
Currently, around 60% of the LNG used in India’s urea production is imported from Qatar, under a long-term supply agreement. Of India’s 32 urea plants, 30 rely on natural gas as their primary feedstock.
Apart from potential supply constraints, analysts also cautioned that disruptions to major Gulf shipping routes could drive up global prices of urea and diammonium phosphate (DAP), increasing the government’s fertiliser subsidy burden.
Despite these concerns, fertiliser stocks are currently higher than last year. By the end of February, urea inventories stood at about 5.5 MT, compared with 4.9 MT a year earlier. DAP stocks were estimated at around 2.5 MT, nearly double the 1.3 MT recorded last year. Meanwhile, stocks of complex fertilisers such as NPK (nitrogen, phosphorus, potassium) exceeded 5.4 MT, up from 3.2 MT a year ago—largely due to a surge in imports during the current financial year.
