Why Iran war didn't cause fertiliser crisis, Pg9

Key Highlights:

• The Iran-Israel war and the effective closure of the Strait of Hormuz since February 28, 2026, caused a significant global energy supply shock.
• India's urea supply remained stable due to proactive government measures, despite disruptions in Liquefied Natural Gas (LNG) imports.
• Domestic urea production recovered to 71.5 lakh tonnes in April-June 2026, a 5.4% increase compared to the same period last year.
• The government diversified LNG sourcing to the spot market and secured 42 lakh tonnes of imported urea through tenders.
• Supplies of Di-ammonium Phosphate (DAP) and complex fertilizers remain challenging due to raw material shortages and price hikes for phosphoric acid and sulphur.
• An El Niño-induced monsoon deficiency led to a 12.6% below-normal rainfall during June-July and a 2.9% reduction in kharif crops sown area.

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Detailed Insights:

• The Strait of Hormuz is a critical maritime chokepoint connecting the Persian Gulf with the Gulf of Oman, vital for global energy trade.
• India's LNG imports, primarily from Qatar and UAE, faced disruptions due to shipping blockades and infrastructure damage from missile strikes.
• Public sector undertakings like GAIL (India) Ltd and Indian Oil Corporation were directed to diversify LNG sourcing from countries including the US, Oman, and Nigeria.
• State-owned entities such as Indian Potash Ltd (IPL) and National Fertilizers Ltd issued tenders to secure imported urea.
• The government absorbed the higher import costs for urea to shield farmers from price increases, impacting the overall fertilizer subsidy bill.
• Raw materials for DAP and complex fertilizers, such as phosphoric acid and sulphur, experienced substantial price increases.
• Sulphur prices surged significantly due to geopolitical events, including drone attacks on Russian oil refineries and tightened supplies from West Asia.
• The El Niño phenomenon, characterized by the warming of Pacific Ocean waters, contributed to the monsoon deficiency in India.
• Subdued demand for fertilizers was observed due to the deficient monsoon, contrasting with previous years of high demand.

Key Concepts Involved:

• Strait of Hormuz: A narrow, strategically vital waterway connecting the Persian Gulf with the Gulf of Oman, crucial for global energy trade.
• Liquefied Natural Gas (LNG): Natural gas cooled to a liquid state for efficient storage and long-distance transport, primarily methane.
• Urea: A nitrogen-rich chemical fertilizer (46% nitrogen) essential for plant growth, widely used in India.
• Di-ammonium Phosphate (DAP): A widely used phosphatic fertilizer containing both nitrogen (18%) and phosphorus (46%), crucial for early root development.
• Complex Fertilisers: Fertilizers containing two or more primary plant nutrients (N, P, K) in chemical combination, often granular.
• El Niño: A climate pattern characterized by the unusual warming of surface waters in the eastern tropical Pacific Ocean, affecting global weather.
• Kharif Crops: Monsoon crops sown with the onset of the southwest monsoon (June-July) and harvested in September-October.
• Rabi Cropping Season: The winter cropping season in India, with sowing in October-November and harvesting in March-April.