Full Breakdown
Impact of Middle East Conflict on India's Fertiliser Supplies
3/26/2026, 3:25:01 PM
Current Fertiliser Supply Situation
India's fertiliser supplies are facing significant pressure due to disruptions in shipping routes caused by the ongoing conflict in the Middle East. As the world's second-largest fertiliser user, India heavily relies on imports of both raw materials and finished products, primarily sourced from the Gulf region. The Strait of Hormuz, a critical shipping lane, has experienced interruptions, raising concerns about potential declines in agricultural output and rising food prices.
Prime Minister Narendra Modi has assured that the government is taking measures to safeguard fertiliser supplies and protect farmers from adverse effects. Current stocks, estimated at approximately 6.2 million tonnes as of March 19, are deemed sufficient for the upcoming sowing season, which peaks from June to September. However, analysts caution that prolonged disruptions could alter this outlook.
Regional Perspectives and Concerns
Farmers in key grain-producing states such as Punjab and Haryana report that they are not yet experiencing supply issues as the sowing season approaches. Typically, they begin purchasing urea in May. Manpreet Singh Grewal, president of a farmers' collective, expressed uncertainty about the longevity of current stocks if the conflict continues. Experts like Siraj Hussain, a former federal secretary of agriculture, warn that the situation could worsen, emphasizing the need for government preparedness for potential shortages.
Industry Insights and Future Implications
Executives from fertiliser companies have indicated that shortages could arise later in the season if the conflict persists. Natural gas, a primary raw material for urea production, is predominantly imported from the Gulf, with India relying on external sources for about 85% of its needs. Current production is hampered by a government order limiting gas supply to fertiliser plants, which are operating at only 70% capacity. This has led to reduced production levels, raising concerns about future availability.
Alberto Persona, director of fertiliser and sustainability analytics at S&P Global Energy, noted that while short-term supply disruptions of up to four weeks can be managed through local production or alternative imports, extended disruptions would pose significant challenges. The global fertiliser market has also seen rising prices, with urea costs increasing alongside gas prices in Asia.
Official Statements and Responses
In response to the situation, Modi has announced initiatives to boost domestic fertiliser production and diversify import sources to mitigate reliance on a limited number of countries. Agriculture Minister Shivraj Singh Chouhan has directed officials to ensure a steady and equitable supply of fertilisers. However, experts warn that the crisis may escalate the government's subsidy burden as higher global prices increase the cost of supplying fertilisers at controlled rates.
Conflicting Reports & Gaps
There are varying opinions on the immediate impact of the supply disruptions on crop yields. While some experts believe that the risk to yields for the upcoming season is minimal, they caution that the long-term implications could be more severe if the conflict continues. The overall impact on food prices may also hinge more on market expectations than on immediate changes in crop output.
Verbatim Quotes
- "We don't know how long the stock will last if the war stretches any further." — Manpreet Singh Grewal, President of a Farmers' Collective
- "The government should be preparing for a shortage of urea and other fertilisers for the monsoon harvest." — Siraj Hussain, Former Federal Secretary of Agriculture
- "Up to four weeks [of supply disruptions] are absorbable via local production or imports from other regions. Anything more than that would become more concerning." — Alberto Persona, Director of Fertiliser and Sustainability Analytics at S&P Global Energy
