FERTILIZER FAULT LINE

Strong rains may boost sowing, but without fertilizer self-sufficiency, India remains hostage to global uncertainties

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The fertilizer sector is under pressure this kharif (summer sowing) season.

Reports of urea shortages, India's most widely used fertilizer, meeting over half of (55%) total chemical fertilizer demand, are emerging across states, led by a surge in sowing after abundant monsoon rains.

A similar shortage of di-ammonium phosphate (DAP), the second most widely used fertilizer in India after urea, was reported during the last rabi (winter sowing) season.

The recurring shortages are concerning. While both the government and private sector are working to address the issues, much of the sector's vulnerability stems from the ongoing geopolitical situation and disruptions in global supply chains. After the Covid pandemic, fertilizer prices rose sharply, but they corrected towards the end of FY23-24, only to rise again due to escalating geopolitical tensions and volatility in global markets. The Russia-Ukraine conflict and Israel-Iran tensions have driven up fertilizer prices in the international market.

However, the timely availability of fertilizers is essential for both the farming community and the country's food security.

How can India shield itself from future global uncertainties? The key lies in achieving self-sufficiency in fertilizer production. That said, complete independence is challenging, as the raw materials required for fertilizer manufacturing are scarce and must be imported.

India's annual fertilizer consumption totals around 70 million metric tonnes (MT), making it the second-largest consumer and third-largest producer of fertilizers globally. Around 87% of India's annual urea consumption, which totals about 39 MT, is met through domestic production.