India urea producers trim
India’s urea producers have begun trimming output after the ongoing conflict involving Iran disrupted the supply of liquefied natural gas (LNG), a key feedstock for fertiliser production. The supply shock is raising concerns over fertiliser availability ahead of the upcoming agricultural season and highlighting the vulnerability of India’s fertiliser sector to geopolitical disruptions.
The crisis escalated after attacks and shipping risks in the Strait of Hormuz disrupted energy shipments from the Middle East. The strait is a critical global energy corridor through which significant volumes of oil and LNG pass. As tensions intensified, several LNG cargoes destined for India were delayed or cancelled, forcing energy companies to ration supplies to industrial users, including fertiliser plants.
India depends heavily on imported LNG to run its gas-based fertiliser plants, particularly for the production of urea. With supplies tightening, several fertiliser manufacturers have begun reducing production levels to conserve fuel. According to industry officials, current fertiliser inventories remain adequate for the short term, but prolonged disruptions could force India to increase fertiliser imports at higher global prices.
The situation worsened after Qatar — one of the world’s largest LNG exporters and a major supplier to India — suspended some shipments due to the conflict and safety concerns in the region. Petronet LNG, India’s largest LNG importer, issued a force majeure notice after cargo movements from Qatar were interrupted, prompting downstream companies to reassess supply allocations.
Experts warn that the disruptions could affect fertiliser markets across Asia. Middle Eastern countries account for a significant share of global nitrogen fertiliser exports, and supply cuts from the region have already triggered a sharp rise in urea and ammonia prices in international markets.
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For India, which relies on the Middle East for a large portion of its fertiliser and energy imports, the conflict could have wider implications for agricultural input costs and food prices. Analysts say the government may need to secure alternative LNG sources or increase fertiliser imports if the crisis continues, particularly as farmers prepare for the next crop cycle.
If the geopolitical tensions persist, industry observers warn that fertiliser production cuts and rising energy prices could place additional pressure on India’s farm sector in the months ahead.
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