China’s Export Restrictions Impacting Fertiliser Supply
China’s recent export restrictions have created disruptions in the global fertiliser market. This situation particularly affects di-ammonium phosphate (DAP), a vital fertiliser for crop development. The restrictions are aimed at prioritising domestic agricultural needs and supporting the growing demand for phosphates in electric vehicle battery production.
Current Supply Challenges
India is facing a critical shortage of DAP. Opening stocks for the current kharif planting season stood at 12.4 lakh tonnes, lower than previous years. China has reduced its exports drastically. In 2023-24, India imported 22.9 lakh tonnes of DAP from China, but this figure plummeted to 8.4 lakh tonnes in 2024-25. No imports from China have been recorded in 2025.
Price Surge and Market Dynamics
The tightening of the phosphate market has led to rising prices. Recent contracts from Jordan show a landed price of $781.5 per tonne, up from $515-525 last year. Other suppliers like Saudi Arabia are quoting prices over $810 per tonne. The price of phosphoric acid, crucial for DAP production, has also escalated, indicating a broader impact on fertiliser costs.
Shifts in Fertiliser Consumption
DAP sales in India have declined from 108.1 lakh tonnes in 2023-24 to 92.8 lakh tonnes in 2024-25. This decline may encourage a shift towards balanced fertilisation practices. Agronomists suggest that high-analysis fertilisers like DAP may not be necessary for all crops.
Growth of Alternative Fertilisers
As DAP sales fall, the demand for NPKS complexes is rising. Sales increased by 28.4% from 110.7 lakh tonnes in 2023-24 to 142.1 lakh tonnes in 2024-25. Ammonium phosphate sulphate (APS) has emerged as a popular alternative due to its balanced nutrient composition. Its sales rose , indicating a shift in farmer preferences.
Implications for Farmers and Policy
The Government of India has fixed the maximum retail price of DAP, but farmers often pay higher rates. The shortage has led to increased sales of single super phosphate and NPKS complexes. Farmers are adapting to the new supply landscape by adjusting their fertiliser application strategies, which may ultimately lead to more efficient resource use.
Future Considerations
India’s reliance on imported DAP marks the need for a strategic approach to fertiliser production. Reducing DAP consumption could optimise the use of imported materials and conserve foreign exchange. The current situation puts stress on the importance of developing domestic fertiliser manufacturing capabilities.
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Paul
July 5, 2025 at 5:49 amIs it not good for domestic fertilizer companies like Paradeep phosphates and FACT