Weak monsoon may boost demand for soluble fertilizers, but prices remain a primary risk
The Soluble Fertilizer Association of India (SFAI) warns that while dry weather may drive demand for water-soluble products, surging prices of 60–100% threaten agricultural adoption this Kharif season.
An uncertain monsoon during India’s Kharif season may work in favor of soluble fertilizer makers, but a sharp rise in prices poses a significantly bigger risk to market demand. According to the Soluble Fertilizer Association of India (SFAI), prices for key inputs have surged by 60 to 100 percent over the past year. SFAI President Rajib Chakraborty attributed this trend to export restrictions imposed by China and logistics disruptions caused by tensions in West Asia, which have complicated supply chains.
The most significant concern for the sector is the potential for a sharp decline in consumption as farmers respond to rising costs. For instance, Monoammonium Phosphate (MAP), which was previously priced at approximately 1,000 USD per tonne, is now trading between 1,500 and 1,600 USD. Chakraborty emphasized that an increase of 600 USD per tonne is a major burden. When fertilizers become prohibitively expensive, farmers often opt to reduce usage or shift to cheaper alternatives like Single Super Phosphate (SSP), which has a much lower phosphorus content compared to specialty products like MAP.
India’s reliance on imports remains high, as domestic manufacturing capacity for soluble fertilizers is minimal. Importers have attempted to source from Russia and the CIS region to compensate for the shortfall, but availability from these areas remains constrained. For the current fiscal year, total imports are estimated at 200,000 to 250,000 tonnes, with about 100,000 tonnes having reached Indian shores by June. Historically, the bulk of consumption for these products is concentrated in the period between September and March.
Despite the price surge, the immediate supply situation is not yet critical due to inventory carryovers from the previous year, when excessive rainfall and flooding dampened demand. However, there is growing concern that a spike in demand due to patchy rainfall this season could strain supplies. Because water-soluble fertilizers require significantly less water for application compared to traditional methods, farmers facing dry conditions may find them more attractive to support crops like cotton, which often require additional nourishment during periods of environmental stress.
Consignments have begun to arrive at Indian ports, and industry experts hope that prices—which are currently at their peak—might soften as these supplies circulate through the market. While the southwest monsoon has reached all parts of the country, the India Meteorological Department has issued warnings of below-normal rainfall from mid-July onwards. Should these dry conditions persist, the adoption of specialty fertilizers is expected to rise as farmers attempt to mitigate the effects of heat stress and poor soil moisture on their crops.