Weak monsoon may boost soluble fertiliser demand; SFAI warns of price risks
An erratic monsoon in India could drive up demand for soluble fertilisers, but a sharp surge in prices poses a significant risk to consumption, according to the SFAI.
Uncertain weather patterns during India's current Kharif season are creating a complex landscape for the soluble fertiliser market. According to the Soluble Fertilizer Association of India (SFAI), while dry conditions may increase demand for these products due to their efficiency in fertigation, the primary concern remains a steep rise in input prices.
SFAI President Rajib Chakraborty stated that prices for key inputs have surged by 60–100% over the past year. The primary drivers behind this volatility are export curbs imposed by China and supply chain disruptions linked to geopolitical tensions in West Asia. Specifically, the price of monoammonium phosphate (MAP), which historically hovered around $1,000 per tonne, has climbed to $1,500–$1,600 per tonne. Chakraborty described this $600 increase as a significant hurdle for the sector.
Despite the price pressure, current supply levels remain adequate due to carryover stocks from last year, when excess rainfall in key agricultural regions resulted in lower-than-average consumption. However, Chakraborty cautioned that if demand picks up sharply in the coming months, current supplies might be strained. India typically imports approximately 4 lakh tonnes of soluble fertiliser annually, with about 1 lakh tonne already landed by June in the current fiscal year.
There is a growing concern that farmers may shift toward cheaper substitutes, such as single super phosphate (SSP), which has a significantly lower phosphorus content of 20-22% compared to MAP’s 61%. Furthermore, a shift back to conventional fertilisers like urea and DAP could exacerbate the government's subsidy burden, creating additional economic challenges.
The monsoon remains the key variable. Although the southwest monsoon has covered the entire country, the India Meteorological Department (IMD) has issued warnings of below-normal rainfall from mid-July onwards. In dry conditions, farmers growing crops like cotton are more likely to adopt soluble fertilisers, which require less water than traditional methods. Industry leaders remain hopeful that as new consignments arrive at ports, market prices may eventually begin to ease.