Why Iran war threatens India's fertilisers supply, Pg14

Key Highlights:

• India heavily relies on imports for urea, DAP, and MOP fertilizers, with significant dependence on GCC countries, Russia, and China.
• The US-Israel versus Iran war highlights India's vulnerability in agriculture and food security due to geopolitical tensions affecting fertilizer supply chains.
• Russia is a major supplier of MOP, while China was a leading source of urea and DAP until 2023-24.
• Domestic urea plants depend on imported natural gas, with the fertilizer sector consuming 29% of India's total natural gas, a significant portion of which comes from Qatar and the UAE.
• Comfortable fertilizer stocks exist currently, but prolonged conflict could disrupt supplies, especially of LNG, ammonia, and sulphur shipped through the Strait of Hormuz.

Detailed Insights:

• India's self-sufficiency in crop production contrasts sharply with its fertilizer import dependence, particularly for urea (10 mt) and DAP (6.5 mt) in 2025-26.
• The GCC countries supply about 75% of India's urea imports, while Saudi Arabia is a major source for DAP.
• Disruption of the Togliatti-Odesa pipeline and Ukrainian drone attacks have impacted Russia's exports of ammonia and sulphur, leading to price increases.
• The Strait of Hormuz is a critical chokepoint for LNG, ammonia, and sulphur imports, and its closure would severely affect India's fertilizer production.
• Alternatives for LNG and ammonia supply include the US, Australia, Indonesia, and Malaysia, but these may not fully compensate for disruptions from West Asia.
• The government may prioritize fertilizer and city gas distribution sectors in case of supply disruptions to ensure food security and uninterrupted fuel supply.

Key Concepts Involved:

• Urea: A nitrogen-rich compound used as a fertilizer.
• DAP (Di-ammonium Phosphate): A widely used fertilizer containing both nitrogen and phosphorus.
• MOP (Muriate of Potash): A potassium-containing salt used as a fertilizer.