Fertilizers might become costlier in India this October
What's the story
India's specialty fertilizer industry is bracing for fresh supply woes as China plans to reimpose export curbs from October. The move could lead to price hikes, directly affecting farmers in the country. Rajiv Chakraborty, President of the Soluble Fertilizer Industry Association (SFIA), confirmed this in an interview with PTI. The temporary resumption of Chinese specialty fertilizer exports has provided relief. However, it will be short-lived as Beijing plans to tighten export controls through increased inspections and consignment delays.
Global impact
Temporary fix in India-China relations
Chakraborty said, "It's a temporary fix because China is closing the export window from October. They will be closing it for the entire world market, not only for India." He further explained that while problems between India and China seem resolved for now, the restriction pattern is likely to return. "Once they stop or restrict supplies, they don't stop completely. They restrict by imposing inspections and delaying consignments," Chakraborty added.
Supply scramble
Indian companies racing against time to secure supplies
With a one-month window before restrictions begin, Indian specialty fertilizer companies are racing against time to secure enough supplies. Global sourcing firms are working overtime to meet their entire seasonal requirements during this period. Chakraborty said, "We have very good global sourcing players in the market who will be sourcing their entire consignments and requirements in this one month only."
Supply relief
Price hikes inevitable
The industry anticipates that indigenous supplies will be available by mid-season, which could alleviate some supply constraints. However, price hikes seem unavoidable. "We will not see much impact this time except the price hikes... Anyway price hikes will impact farmers directly," Chakraborty said. India's dependence on Chinese specialty fertilizer imports has increased dramatically since 2005 when European suppliers began sourcing from China for Indian markets.
Import statistics
Overwhelming dependence on Chinese fertilizers
Today, India imports 80% of its specialty fertilizers directly from China and the remaining 20% indirectly through Chinese sources. Except for 5% NPK formulations produced domestically, the country is 95% dependent on Chinese supplies for specialty fertilizers. The recent halt in Chinese exports led to a massive price surge and supply shortages in this segment.