Entities such as National Fertilizer and Indian Potash have floated tenders to import 2 million tonne (MT) of urea each, as the stock position of key soil nutrients supplied to farmers at the highly subsidised rate has declined sharply.
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As of August 1, urea stock was 3.7 MT, a sharp decline from 8.6 MT a year ago. With the rise in consumption by 12% during the April-June period, it has put some pressure on urea supplies, with several states, including Karnataka, Andhra Pradesh and others have raising issues of delay in supplies of soil nutrients with the fertiliser ministry.
Rising imports and global price trends
The fertilizer ministry has stated that against the requirement of 18.53 MT of urea during the entire kharif season, 2025, while the pro-rata requirement between April 1 – August 4, 2025, was 12.44 MT, against which the availability of key soil nutrients was 16.58 MT.
Industry sources said that while urea prices have risen to $ 530/tonne from around $ 420/tonne that prevailed in April, China’s lifting restriction on urea exports may soften prices.
In FY25, the total urea import of 5.64 MT was from mostly Oman, Russia, the United Arab Emirates, Qatar and China.
Out of the total annual consumption of around 35 – 36 MT urea, around 31 to 32 MT is domestically produced.
About 87% of urea consumption is domestically produced while rest is imported from various countries.
Sources said even for the production of urea, the country imports a significant volume of natural gas, a key raw material for urea. Just 15% of the domestic urea units are based on domestic gas, while the balance capacity is driven by imported LNG.
Subsidy pressure and demand drivers
Agriculture minister Shivraj Singh Chouhan recently stated that there could be two main reasons for the increased demand for urea in the current kharif season, which include an increase in the sowing of rice, maize, and other crops due to adequate monsoon rainfall and diversion of urea to non-agricultural purposes.
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“If the demand is genuinely for farming needs, urea will certainly be supplied — the ministry is working promptly on this,” Chouhan said in a review meeting.
In the case of urea, farmers pay a fixed price Rs 242 per bag (45 kg) against the cost of production of around Rs 2,650 per bag. The balance is provided by the government as a subsidy to fertiliser units. The urea prices have been unchanged since March 2018.