New Delhi: The ongoing conflict in West Asia is disrupting the supply of finished fertilisers and raw materials, which is set to push the subsidy for soil nutrients beyond Rs 2 lakh crore, 20% more than the Budget Estimate for 2026-27, according to a government assessment at the current level.
Government Prioritises Supply
The government has prioritised ensuring adequate supply and will keep updating the finance ministry about additional expenditure, an official said. This is the second time in the past four years that fertiliser prices are soaring globally.
Impact on Prices
Responding to a question at an inter-ministerial briefing on developments in West Asia, Aparna S Sharma, additional secretary in the fertilisers department, said the price of urea discovered through global tenders has almost doubled compared to pre-crisis levels. The cost of natural gas, which is essential for domestic urea production, has also almost doubled.
No Change in Retail Prices
Despite the spike, prices of urea and diammonium phosphate (DAP) remain unchanged at Rs 266.5 per 45 kg bag and Rs 1,350 per 50 kg bag, respectively. The government said there is more than adequate stock of fertilisers for kharif crops.
Import Plans
The government plans to import 64 lakh tonnes of urea and 19 lakh tonnes of other fertilisers this kharif season. Of the planned imports, 9.4 lakh tonnes of urea has been received since the crisis began. Another 13.1 lakh tonnes were secured through a global tender in February, while 25 lakh tonnes more have been tendered and are expected to arrive from May.
Supply Assurance
Most of the imports are routed through the Strait of Hormuz. We are very much sure that we will be getting the supplies on time, Sharma said. She also noted that domestic production has increased, with urea plants receiving 97% of their gas requirement.
Domestic Production and Additional Tenders
Post-crisis domestic urea production has reached 35.4 lakh tonnes. The government has also floated a global tender for the import of 12 lakh tonnes of DAP, 4 lakh tonnes of triple superphosphate (TSP), and 3 lakh tonnes of ammonium sulphate to ensure adequate supplies during the peak kharif season.
