India books phosphate fertilizer at 40% above pre-war prices

India, the world’s top buyer of diammonium phosphate, has contracted the crop nutrient at prices almost 40% higher than pre-war levels as the Middle East conflict disrupts supplies and pushes global benchmarks higher.

Indian Potash Ltd., which imports fertilizer for the government and other companies, will secure 705,000 tons for delivery on the country’s west coast at $930 per ton, according to people familiar with the matter. Another 641,500 tons will be delivered on the east coast at $935 per ton, said the people who asked not to be named discussing private information.

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The offers are roughly 39% above rates, including freight costs, seen before the start of the Iran war, according to Green Markets data. Indian spot prices were quoted at $667.50 a ton on Feb. 27, the data showed.

The total volume contracted was about 12% higher than the 1.2 million tons sought in the last week’s tender, according to the people.

A spokesperson for the fertilizer ministry didn’t immediately respond to an email sent after office hours. India’s government partly subsidizes sales of DAP fertilizers to farmers at below market rates.

Although the Middle East is a smaller supplier of phosphate fertilizers than nitrogen-based varieties, it accounts for nearly half of the global supply of sulfur, a key input, leaving the market exposed to disruptions in the Strait of Hormuz.

India also procured 2.5 million tons of urea in a recent tender, paying nearly double the pre-war levels. The purchases are coming at a crucial period ahead of sowing for monsoon crops such as rice, corn and soybeans.