Mansukh Mandaviya, minister for chemicals and fertilisers (Photo: Getty Images)
Next week minister for chemicals and fertilisers Mansukh Mandaviya will travel to Israel and Jordan amid a global scramble for fertilisers due to the Ukraine war and a chain of events that includes a deterioration of China’s ties with Australia and Morocco’s foreign relations priorities.
Israel and Jordan are important suppliers of diammonium phosphate (DAP) which India needs along with Urea. The search for supplies has intensified as India seeks to boost its stocks ahead of the monsoon and tie up stable conduits even as international prices soar.
Interestingly, even as India-China military tensions remain unresolved, China has been a major supplier of urea with India needing to import around 60-70 lakh tonnes a year. The spanner in the works was not India-China bickering but cessation of supply of Australian coal to China’s urea plants. The post-Covid dip in relations mean’t that China is not only receiving Australian coal and cost of replacement has risen by as much as 50%.
With India, China, Iran, Russia and Oman being main suppliers of Urea, the fertiliser was in short supply even after three new plants having come up in India. A production capacity of around 245 lakh tonnes still meant a gap as India needs 350 lakh tonnes a year.
The Russian invasion of Ukraine has squeezed supplies from Russian firms while Iran is still in the shadows of sanctions. The fertiliser subsidy has soared, now at par with the food subsidy bill at a staggering Rs 2.5 lakh crore. The cabinet recently cleared Rs 60,939 crore just for phosphate based fertlisers.
When it comes of DAP, the rock phosphate is to be found in Morocco and Russia while Indian deposits are low grade. Morocco, however, could be inclined to consider requests from the US though India is also reaching out, notably with help in supply of anti-Covid vaccines.
As countries chase limited supplies of fertiliser and are dogged by high prices, Mandaviya will hope to close a few deals in West Asia soon.