Main points
- India is in talks to increase fertilizer purchases from Russia, Belarus and Morocco due to risks of shortages amid geopolitical tensions.
- The country is looking for alternative supply channels to ensure the stability of the agricultural sector, as agriculture is critically important to its economy.
Who will India buy fertilizers from / Photo by Pexels
India has stepped up negotiations on fertilizer imports amid risks of reduced supplies from traditional sources. Geopolitical tensions and export restrictions could affect the global market balance.
Why does India want to buy more from Russia and Belarus?
India, one of the world's largest importers of fertilizers, is in talks to increase purchases from Russia, Belarus and Morocco, Reuters reported, citing concerns about a potential shortage amid tensions in the Middle East and export restrictions from China.
Sources said the country is actively looking for alternative supply channels to ensure the stability of the agricultural sector. Agriculture plays a key role in India's economy, so uninterrupted supply of fertilizers remains critical.
India imports major fertilizers, including urea, diammonium phosphate, and potassium chloride, as well as liquefied natural gas, which is used as a raw material for the production of nitrogen fertilizers.
A significant portion of supplies traditionally come from the Middle East. In particular, Saudi Arabia is a key supplier of diammonium phosphate and Oman is a key supplier of urea. Overall, the region accounts for about half of India's imports of such fertilizers.
Indian authorities are concerned about the prolongation of the conflict
According to sources, despite the existing reserves, if the conflict over Iran drags on, the situation could become more complicated. That is why the Indian side is already trying to secure additional volumes for the coming months.
Although imports are handled by individual companies, negotiations with foreign suppliers are often conducted jointly, as the fertilizer market in India is regulated by the state and prices for farmers are subsidized.
Demand for fertilizers traditionally increases in the summer, during the planting season when farmers plant rice, corn, cotton, and oilseeds. That is why the issue of supply stability remains strategic for the country.
Sowing under threat: Ukraine lacks fertilizers, costs have increased by almost 30%
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Ukrainian farmers are facing a shortage of fertilizers and rising costs due to geopolitical factors and rising fuel prices.
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UCAB proposes to abolish the duty on fertilizer imports and reduce excise taxes on fuel to stabilize the situation and avoid a reduction in the harvest.