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Domestic fertilizer output is holding steady in recent months. The index of fertilizers as per core sector data stood at 134.80 in September 2024, up 1.87% on year. Focus is turning on the rabi crops sowing now. Above normal rainfall is likely in several parts of central, southern peninsular and northeast India from October to December, the India Meteorological Department said in a latest update. This could boost early sowing in key rabi crops over coming months. According to IMD, 2024 monsoon season ended with 7.6% more rainfall than normal. Fertilizer prices, as measured by wholesale price index for the manufacture of fertilizers and nitrogen compounds stood at 142.7 in September, down marginally compared to 143.2 in August and falling to lowest levels since March 2024. Meanwhile, globally, the Green Markets Weekly North America Fertilizer Price Index continued to edge higher in October 2024. The index hit near 544 mark in last week of October 2024 - testing highest level in seven months.
Major global developments:
According to agricultural Market Information System (AMIS), on 2 October, Germany launched its EUR 1.1 billion (USD 1.2 billion) Raw Material Fund for critical and strategic raw minerals, including phosphorus, phosphate rock, and potash. The stated aim of the Fund is to reduce the dependence of Germany on other countries. On 14 October, the Russian Federation expanded the export quota for complex mineral fertilizers, through Resolution No. 1369. The new quota is set at 7576874 tonnes, an increase of 297085 tonnes from its previous level. The quota is valid until 30 November 2024.
On 23 October, the Russian Federation extended its export quota regime for fertilizers, through Resolution No 1400. Between 1 December 2024 and 31 May 2025, up to 11.2 million tonnes of nitrogen fertilizers may be exported, along with up to 8.0 million tonnes of complex fertilizers.
AMIS noted that Urea prices increased slightly in October responding to tensions in the Near East and tight supply out of China. The recent tenders in India encouraged exports from the Near East and the Baltic. Loosening of Chinese export restrictions remains uncertain. While India just announced a new import tender for urea imports into December, seasonally slower demand elsewhere as the end of the year nears is likely.
Outlook:
The overall demand outlook is supportive for Fertilizers given the elevated food prices and rise in rabi crop Minimum Support Prices (MSP). The Cabinet Committee on Economic Affairs (CCEA) has approved the increase in MSP for all mandated Rabi Crops for Marketing Season 2025-26. Wheat MSP has been hiked from Rs 2275 per quintal to Rs 2475 per quintal while MSP of key pulses crop Gram has been raised from Rs 5440 per quintal to Rs 5650 per quintal. MSP of Lenthil has been hiked from Rs 6425 per quintal to Rs 6700 per quintal. Rapeseed MSP has been hiked from Rs 5650 per quintal to Rs 5950 per quintal. Government has increased the MSP of Rabi Crops for Marketing Season 2025-26, to ensure remunerative prices to the growers for their produce. The absolute highest increase in MSP has been announced for Rapeseed & Mustard at Rs.300 per quintal followed by Lentil (Masur) at Rs.275 per quintal. For gram, wheat, safflower and barley, there is an increase of Rs.210 per quintal, Rs.150 per quintal, Rs.140 per quintal and Rs.130 per quintal respectively. Meanwhile, India has launched yet another tender for urea imports into December to make up for lagging domestic production. The phosphate situation is challenging for the Rabi season, with analysts estimating DAP stocks close to 40 percent lower than the 2020-2023 average, and reporting DAP shortages in key crop production regions, according to AMIS.
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