India urea production has declined sharply due to disruptions linked to the West Asia conflict, raising concerns over supply stability. However, the government has moved quickly to stabilise availability through imports and higher gas procurement.
Urea Output Drops to 18 Lakh Tonnes
India’s urea output decline became evident this month as production fell to around 18 lakh tonnes, compared to the normal monthly average of 24 lakh tonnes. Officials attributed the drop to limited gas availability and adjustments in plant operations.
The government expects India urea production to recover soon as liquefied natural gas (LNG) supply improves through spot purchases.
Gas Supply Issues Hit Domestic Production
Lower gas allocation has impacted fertiliser plants across the country. Authorities estimate a temporary production loss of 30,000–35,000 tonnes per day.
To manage the situation:
- Some plants advanced their annual maintenance shutdowns
- Several units are now restarting operations
- Around 27 urea plants are currently receiving gas supplies
Government Steps to Stabilise Supply
Despite the urea output decline, officials have reassured that fertiliser stocks remain adequate. Current total stock stands at 180 lakh tonnes, which is 22% higher than last year.
To strengthen supply chains, the government is:
- Issuing a global tender for 13.1 lakh tonnes of urea
- Expanding long-term import agreements with countries like Saudi Arabia and Oman
- Exploring additional sourcing from Russia, Morocco, Australia, Indonesia, Malaysia, Jordan, Canada, Algeria, and Egypt
LNG Prices Surge, Subsidy Burden May Rise
The West Asia conflict has significantly increased input costs, including LNG, ammonia, sulphur, and freight.
- Spot LNG prices: $19.5–19.6 per mmBtu
- Pre-conflict levels: $11–12 per mmBtu
Currently, 75–80% of gas requirements are being met, with about 15 mmscd sourced from the spot market out of a total daily requirement of 52 mmscd.
Higher input costs are expected to increase the government’s fertiliser subsidy burden in the coming months.
States Asked to Prevent Hoarding
The Centre has directed states to monitor fertiliser sales closely, especially during the lean season, to prevent hoarding and black marketing. Strict action has been warned against any irregular practices.
Officials have assured farmers that fertilisers remain available at existing prices.
| Parameter | Current Status | Previous / Normal | Remarks |
|---|---|---|---|
| Urea Production | 18 Lakh Tonnes | 24 Lakh Tonnes | Sharp decline due to gas shortage |
| Production Loss | 30,000–35,000 TPD | — | Due to reduced gas allocation |
| Total Fertiliser Stock | 180 Lakh Tonnes | +22% YoY | Comfortable availability |
| LNG Availability | 75–80% | 100% (Normal) | Shortfall managed via spot buying |
| Spot LNG Price | $19.5–19.6/mmBtu | $11–12/mmBtu | Significant cost increase |
| Daily Gas Requirement | 52 mmscd | — | 15 mmscd from spot market |
| Import Tender | 13.1 Lakh Tonnes | — | To stabilise supply |
