India Faces Fertilizer Shortage: Are We Too Dependent on China?

India is facing an acute shortage of DAP, a type of fertiliser that farmers use to grow crops. This shortage causes problems, especially in states like Punjab, Haryana, and Uttar Pradesh, where farmers rely on DAP to grow wheat, mustard, and other crops. So, what's causing the shortage, and what can be done about it?

Why is There a DAP Shortage?

The basic reason for this shortage is that India imports most of its DAP fertiliser from countries such as China, Saudi Arabia, and Morocco. However, it has not been going well.

China is the biggest exporter of DAP, and China's problems have resulted in a reduction in its exports to India. Because of the restrictions and due to high demand in China itself, they have reduced their exports to India. Imports of DAP from China to India have thus declined by 75% in the first half of the year.

The second one is the situation between Israel and Hamas, which blocks global shipping. The Red Sea - a major shipping route - has also been blocked. This makes it complicated and costly to import from other countries. As a result, the supply of DAP in India has considerably reduced.

India needs around 100 lakh tonnes (LT) of DAP every year, but it imports about 60% of that. This year, DAP production in India has been lower than expected. From April to October 2024, production fell to 25.03 LT, down from 27.01 LT in 2023. Also, imports have dropped from 39.68 LT last year to 27.84 LT in the same period this year. As a result, the DAP stocks available in the country are much lower than needed.

Another issue is the rising price of DAP. In May 2024, the price was $515 per tonne. By October 2024, it had gone up to $642 per tonne. This increase in prices is making DAP even more expensive for farmers. Many farmers have to pay an extra Rs 250-350 per bag, which adds to their financial burden.

How is the Shortage Affecting Farmers?

DAP prices are rising in many parts of India, making it hard for farmers. The price of DAP has increased from $515 per tonne in May 2024 to $642 per tonne in October 2024. This hike is a big burden for farmers who are already trying to source fertiliser.
In Punjab, the state that uses the most DAP in the country, farmers are the worst sufferers. They require about 55 lakh tonnes of DAP for their rabi season, which is winter crops, and the supply needs to catch up to this demand.
Farmers like Baldev Singh from Punjab are forced to pay extra money for DAP, which makes their financial situation even worse. Similarly, farmers in Haryana are also waiting in long lines to buy fertiliser, but many government centres need more stock.

What is the Government Doing?

The Indian government has taken some steps to try to help. They have made long-term agreements with suppliers and have been promoting alternatives to DAP. The government is also offering subsidies, like a special package of Rs 3,500 per tonne on DAP, to make it more affordable for farmers. However, farmers are still not satisfied because the prices remain high, and there needs to be more fertiliser in stock.

What's Next for India?

India should work on producing more fertiliser locally instead of relying on imports. This would help reduce the country’s dependence on other countries and protect food security. India has made progress in producing urea (another type of fertiliser), and new production units are expected to reduce the import dependence for DAP by 15% by FY26.

However, the problem still remains that India still needs to import around 60% of its DAP every year. With the increasing prices of fertilisers, farmers are being promoted to look for alternatives, though these may be more costly and less effective than DAP.
In short words, India is in a fertiliser crisis that has the potential to affect its food supply. The government and farmers need to strategise on how to go about finding long-term solutions to problems like this.

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