India has received a major respite on the fertilizer front as global prices of key nutrients have declined significantly after months of volatility. International urea prices have fallen by as much as $250 per tonne, bringing them down to around $650 per tonne, while diammonium phosphate (DAP) prices have slipped below $900 per tonne.
The decline comes after India recently floated a tender for importing 2.5 million tonnes of urea, which had attracted bids in the range of $935-$959 per tonne for west coast and east coast. According to fertilizer industry sources, the government has now issued a fresh tender for importing 1.7 million tonnes of urea, with prices expected to remain below $700 per tonne.
Weak Global Demand Drives Price Correction
Industry sources said the sharp correction in fertilizer prices is largely due to weak demand from major importing countries at elevated price levels. Buyers across several regions postponed purchases as prices surged earlier this year.
"Limited buying interest at higher prices is the primary reason behind the current decline," a fertilizer industry source told Rural Voice.
India, which heavily subsidizes urea, continued imports at elevated prices to ensure adequate supplies during the ongoing kharif season. However, farmers in countries such as Brazil, across Europe, and in many parts of Africa and Asia generally pay market-linked prices for fertilizers. As prices rose sharply, demand weakened, triggering the recent correction.
Hormuz Disruptions Had Triggered Price Surge
Global fertilizer markets have witnessed extreme volatility in recent months. Prices had surged sharply following disruptions in fertilizer and natural gas shipments through the Strait of Hormuz after military tensions involving Iran, the United States and Israel escalated earlier this year.
The supply disruptions pushed fertilizer prices up by as much as twofold at their peak, raising concerns over global availability and import costs.
India Increased Imports Amid Supply Concerns
India imports around 10 million tonnes of urea annually. At the same time, domestic urea production has been affected by disruptions in gas supplies, reducing output from nearly 2.5 million tonnes per month to around 1.7-1.8 million tonnes.
The decline in domestic production raised concerns over fertilizer availability during the kharif season and the upcoming rabi season, prompting the government to secure imports despite elevated prices.
Non-urea fertilizers were also impacted. Production and imports of NPK complex fertilizers faced disruptions, while the government recently contracted imports of 1.3 million tonnes of DAP prices at $920 per tonne for west coast and $930 per tonne for east coast.
Industry sources said DAP prices have now declined to around $890 per tonne.
Complex Fertilizers Become Costlier
Despite the decline in international DAP prices, fertilizer companies have increased prices of most NPK complex fertilizers. Several variants of these fertilizers are being sold at higher rates as companies pass on rising costs.
Prices of some NPK grades have reached Rs 2,250-Rs 2,450 per 50-kg bag. According to industry sources, at least one major fertilizer company has offered NPK supplies to marketing federations at these price levels.
However, urea prices remain fixed by the government due to their political and economic sensitivity. Similarly, DAP prices continue to be indirectly controlled through subsidies, with the retail price maintained at Rs 1,350 per 50-kg bag under the Nutrient Based Subsidy (NBS) scheme and additional support measures.
Government Assures Adequate Availability for Kharif
Amid concerns over fertilizer availability during the kharif season, the Ministry of Chemicals and Fertilizers has maintained that the country's fertilizer stock position remains comfortable.
According to the ministry, India's fertilizer security is strong, stable and well managed, with supplies of all major fertilizers exceeding current requirements.
For the 2026 kharif season, the Department of Agriculture and Farmers Welfare has estimated total fertilizer demand at 39.054 million metric tonnes. Against this, current stocks stand at approximately 20.012 million metric tonnes, equivalent to about 51 percent of the projected requirement.
Nevertheless, concerns persist over future availability as shipping through the Strait of Hormuz remains restricted. Market participants fear that supplies could tighten during the peak sowing period and later stages of the cropping season if logistical disruptions continue.
The Department of Fertilizers said that following the recent crisis, fertilizer availability has increased by about 11.76 million tonnes through a combination of imports and higher domestic production, helping stabilize supplies ahead of the crucial agricultural season.