Hormuz disruption hits fertiliser trade: Could India's Kharif season be affected?

The Iran war involving Iran is beginning to disrupt fertiliser trade routes and gas supplies, raising concerns about fertiliser availability in India

Also read: Hormuz bottleneck: 2.2 million tonnes of Indian energy assets stranded in the strait

The war has disrupted shipping through the Strait of Hormuz, one of the most important trade routes for energy and fertilisers. About one-third of global fertiliser trade moves through it, alongside roughly one-fifth of the world's crude oil and liquefied natural gas shipments.

Also read: 'If we finish off what's left...': Trump hints stronger Iran offensive could push reluctant allies to secure Hormuz

Those energy flows matter directly for fertiliser production. Natural gas is the primary input used to manufacture urea and accounts for up to 70% of production costs.

With the conflict intensifying, supply chains across the Gulf have begun to feel the strain. Some fertiliser facilities in the region have suspended operations. Qatar has halted LNG export operations and urea plant activity, while shipments across the region have been delayed or suspended.

Global fertiliser prices have already started reacting. Urea prices have risen between 30% and 40%, climbing to about $700 per tonne from roughly $500 earlier. Prices for specialty fertilisers have also increased by around 20%.

Why the disruption matters for India

India is among the world's largest fertiliser consumers, and the sector is partly exposed to disruptions in West Asia.

Although about 80–85% of India's annual urea supply is produced domestically, that production depends heavily on imported gas. Nearly 86% of the LNG required by India's fertiliser plants comes from West Asia.

This means that disruptions in gas shipments or shipping routes could ripple into fertiliser availability if they persist.

India also imports fertilisers directly, particularly phosphatic fertilisers such as Di-Ammonium Phosphate (DAP) and NPK compounds.

Is India facing a fertiliser shortage?

For now, the situation remains manageable.

The government has moved quickly to secure supplies ahead of the Kharif sowing season. India has brought forward a global tender for urea imports and ordered 13.5 lakh tonnes of fertiliser by mid-February, news agency PTI reported on March 14. About 90% of this order is expected to arrive by the end of March.

Domestic stock levels also provide a buffer.

As of March 13, urea stocks stood at about 62 lakh tonnes, roughly 10 lakh tonnes higher than the same time last year. DAP stocks have nearly doubled to 25 lakh tonnes, while NPK stocks have reached a record 56 lakh tonnes.

The government has also prioritised gas supplies for fertiliser plants, guaranteeing at least 70% of the natural gas requirement based on average consumption over the past six months.

Supplies of fertilisers from Russia and Morocco are continuing through alternative shipping routes via the Cape of Good Hope.

Why timing is critical

The real concern is timing rather than immediate availability.

The Kharif season begins with the arrival of the monsoon and accounts for more than 60% of India's total agricultural output. Crops such as rice, cotton, pulses, and maize depend heavily on fertiliser use during this period.

Because fertiliser application is closely tied to sowing cycles, even short delays in availability can affect yields.

"For Kharif, we are well equipped. We have enough fertiliser. From now onwards, we will start bidding globally and procuring for the winter crop," Finance Minister Nirmala Sitharaman said.

For now, India's buffer stocks and import plans offer some protection. But if disruptions in the Gulf stretch beyond several weeks, fertiliser supply and prices could come under greater pressure just as the country's most important crop season begins.