Supplies of key fertilisers and their raw materials in India may face a crunch in the coming months if the blockade of the Strait of Hormuz, a key import route from the Gulf countries, is prolonged. The disruption is likely to hit supplies of urea and diammonium phosphate (DAP) in the forthcoming kharif season (June-September), industry officials said.
There is no immediate shortage of critical fertilisers in the country because farmers are currently in the ‘lean period’ for using soil nutrients. However, the impasse on import of LNG from Qatar poses a serious problen. Industry official said that if imports of feedstock such as LNG crucial for urea production, from Qatar and other Gulf countries don’t resume and DAP imports from Saudi Arabia are not normalised, fertiliser supplies would begin to reduce by April-May.
During April-May, India is expected to produce 2.5 million tonne (MT) of urea, which may get impacted if LNG imports are not streamlined. “In addition to supply constraints, blockade of key shipping routes in the Gulf, would push prices of DAP and urea, inflating the food subsidy expenses of the government,” another official from a fertilizer compay told FE.
Currently, 60% of LNG used in domestic urea manufacturing is imported from Qatar, under a long-term agreement. About 80% of urea production in the country use LNG while rest uses domestic gas. At present, 30 out of 32 urea units use natural gas as feedstock.
Current stocks are robust
Sources said by the end of February, 2026, urea stocks stood at 5.5 MT, compared to 4.9 MT a year ago. DAP stocks with the companies are currently projected around 2.5 MT, against 1.3 MT a year ago. Similarly, amongst the complex fertilisers, NPK (nitrogen, phosphorus and potassium) stocks are higher than 5.4 MT compared to 3.2 MT a year ago.
This is because of a surge in imports in the current fiscal amid a decline in production and a rise in consumption.
In terms of sales, over 63 MT of highly subsidised fertilizers have been distributed to farmers in April-January period of 2025-26, which is an increase of 1.5% compared to the same period in FY256. Urea imports surged 83% to close to over 8.9 MT in the period while inward shipments of DAP rose close to 40% at 6 MT in April-January, FY26 on year.
“We are closely monitoring the supply situation, especially imports of raw materials and finished products which have been impacted by the current conflict in the Gulf region, S K Chaudhari, Director General, Fertilizer Association of India, told FE. Chaudhari said fertilizer production and imports would hit if conflict lingers.
Industry sources indicated that imports of DAP and its key inputs — rock phosphate and phosphoric acid — could also be affected if the conflict continues, as India sources significant volumes of soil nutrients from Saudi Arabia and North African countries.
Three Indian fertilizer firms — IPL, KRIBHCO and Coromandel — signed a five-year agreement with Saudi Arabia’s Ma’aden to import 3.1 MT of DAP annually from the current fiscal. Two-thirds of India’s DAP consumption is met via imports from Saudi Arabia, Jordan and Morocco, increasing the sector’s exposure to regional shipping and pricing volatility.
The annual consumption of fertilizers in the country is around 64-65 MT, out of which urea accounts for 40 MT while DAP consumption is around 11 MT. Rest of the consumption is potash (2-3 MT) and complex fertilizers (10 – 11 MT).