Why Hormuz Reopening Won't Immediately Fix India's Fertiliser Crisis

While a tentative US-Iran peace agreement signals the potential reopening of the strategic Strait of Hormuz, the relief for the fertiliser industry remains months away. Industry executives warn that the complexities of restarting production and clearing logistical backlogs mean prices and availability may not normalize for another three to four months.

The Lag in Production and Natural Gas Restoration

The primary driver for fertiliser price stability is the restoration of natural gas supplies. Industry experts highlight that reopening a shipping lane does not instantly translate to increased production. Gas-processing facilities and refineries require extensive safety inspections, maintenance checks, and staff mobilisation before they can return to full capacity.

A senior fertiliser executive noted that it takes significant time to restart plants and bring production back to normal levels. While the reopening of the Strait could return traffic to pre-war levels within 30 days, the benefits will only filter through the global production network after a prolonged period of recalibration.

Ammonia vs. Sulphur: A Tale of Two Inputs

The impact on specific fertiliser components is expected to be uneven. Ammonia, a critical input for Di-Ammonium Phosphate (DAP) production, is projected to see price stabilisation within one to two months as gas plants in Qatar return to normal operations. Currently, imported ammonia is available in the Indian domestic market to bridge the gap.

However, sulphur remains a major pain point. As a byproduct of petroleum refining, sulphur prices have surged to record levels due to West Asian supply disruptions and high industrial demand. Wholesale sulphur prices are currently fluctuating between $815 and $1,200 per metric tonne. Executives warn that sulphur prices could rise even further before they begin to ease toward December, creating ongoing pressure on DAP supplies in India.

Persistent Logistical and Shipping Bottlenecks

Even if the Strait of Hormuz reopens, the shipping industry faces a massive "queue" effect. The crisis left several vessels carrying urea and DAP stranded, and the sudden resumption of traffic is expected to lead to port congestion, delayed berthing, and lengthy inspection delays.

তাছাড়া, বিমা অনুমোদন এবং শিপিং কোম্পানিগুলোর সতর্কতা পুনরুদ্ধারের গতিকে ধীর করে দিতে পারে। ভারতীয় আমদানিকারকদের জন্য এর অর্থ হলো, বিশ্বব্যাপী সরবরাহ বৃদ্ধি পেলেও কার্গোর জট এবং লজিস্টিক্যাল অনিশ্চয়তার কারণে দেশীয় বন্দরে অত্যন্ত প্রয়োজনীয় সার পৌঁছানোর প্রক্রিয়া ব্যাহত হবে। যদিও বর্তমানে চলমান খরিফ মৌসুমের জন্য ভারতের কাছে পর্যাপ্ত ইউরিয়া মজুত রয়েছে, তবে DAP বিভাগটি বিশ্বব্যাপী সরবরাহ শৃঙ্খলের এই অস্থিরতার কারণে ঝুঁকির মুখে রয়েছে।

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