Sharp Rise in Fertilizer Costs Puts Pressure on Government to Increase Subsidies
Mumbai: The ongoing geopolitical tensions in the Middle East are now beginning to impact Indian agriculture directly. India is being forced to purchase Diammonium Phosphate (DAP), one of the country’s most crucial fertilizers, at nearly 40 percent higher prices, raising concerns about an increased financial burden on farmers ahead of the monsoon season.
Earlier available at around $667 per tonne in February, DAP is now being imported by India at prices ranging between $930 and $935 per tonne. Indian Potash Limited has finalized agreements to procure more than 1.3 million tonnes of DAP for supplies across the eastern and western coasts of the country.
The steep increase in prices is largely linked to the ongoing conflict in the Middle East and the risk of supply disruptions through the Strait of Hormuz. A significant share of sulfur, a key component used in phosphate fertilizers, is sourced from this region.
Rising fertilizer prices are expected to increase overall farming costs. If the government does not significantly raise subsidies, farmers preparing to sow crops such as paddy, maize, and soybean may face serious financial challenges. India has also recently purchased nearly 2.5 million tonnes of urea at almost double the earlier prices.
If fertilizer prices remain elevated for an extended period, the cost of essential food items such as flour, rice, and pulses could also rise in the coming months, affecting ordinary consumers as well. However, the final impact will largely depend on government subsidy policies and future global market conditions.
