Fertiliser companies turn to EU, Russia & West Asia as China halts exports

With China halting specialty fertiliser exports to India for two months now, Indian companies have turned to Europe, Russia and West Asia to import raw materials for manufacturing specialised fertilisers at significantly higher prices. China was the preferred source for these imports due to higher availability, shorter sailing time, and affordable prices, industry insiders noted.

"Imports from China were cheaper and imports from other countries are at 15-20% higher prices already," said Yogesh Chandra, vice president at Transworld Furtichem, maker of Nutrifeed brand of fertilisers.

Around 80,000-100,000 tonnes of raw materials are expected to reach India from alternate sources to replace the 150,000-160,000 tonnes of speciality fertilisers believed to be stuck at Chinese ports, according to estimates by the industry.

While there is no official export ban, Chinese authorities have stopped inspecting India-bound consignments, which is mandatory for export clearance. China is the largest exporter of specialty fertilisers with about 32% share in global trade. It continues to export them to other nations. India imports about 80% of its supplies of these chemicals from China.

Imports from other countries are costlier due to limited availability and higher shipping charges.

Companies expect prices to go up further, particularly those of two important nutrients-mono ammonium phosphate (MAP) and calcium nitrate (CN).

"The prices are going to go higher as Russia also has a limited supply," said Sanket Pawar of Aries Agro, a manufacturer of micronutrients.

As Russia has a limited supply of MAP, companies are also exploring imports from Morocco. While Israel also has some of these chemicals, companies are avoiding it because of the West Asia conflict, industry insiders said.

Specialty fertilisers are used to increase the yields of fruits, vegetables and other remunerative crops.

Chandra of Transworld Furtichem said India is going to face tough times ahead as these products also help with productivity of horticulture plants that earn import revenue for the country.

China has been restricting exports of key raw materials such as rare earth magnets-where it controls about 90% of global production and supplies-in apparent retaliation for US tariffs and other curbs.

It has particularly targeted critical exports to India amid worsening diplomatic relations in recent years while India has restricted Chinese companies' access to domestic markets and has made government approval mandatory for investment by countries that share a land border with India.