Russia- Ukraine Effect: India to Boost Fertilizer Imports from Canada & Israel Now!

After the disruption of shipments caused by Russia's invasion of Ukraine, India is increasing fertilizer imports from countries such as Canada and Israel to ensure enough supply for the upcoming summer sowing season.

India is a major importer of fertilizers for its massive agriculture sector, which employs around 60% of the workforce and contributes to 15% of the $2.7 trillion economies.

"We have made advance preparations for the Kharif (summer-sown crop) season this year. We require around 30 million tonnes of fertilizer, and preparations are being made "Mansukh Mandaviya, the minister of fertilizer, stated without elaborating.

According to him, India will have sufficient opening stock, accounting for around a quarter of the total amount of fertilizer required for the summer season.

With the arrival of the monsoon rains in June, Indian farmers often begin planting crops such as rice, cotton, and soybean.

To fertilize the crops, India depends on imports for its entire annual consumption of 4 million to 5 million tonnes of potash and ships in a third of this from Belarus and Russia.

Landlocked Belarus uses ports in Russia and Lithuania for its exports.

Following Russia's invasion of Ukraine, shipping routes have been stopped, and western sanctions on Moscow, which has termed its operations in Ukraine as a "special military operation," have made trading with Russian and Belarusian companies difficult.

IPL (Indian Potash Ltd.) has expanded its imports from Canada, Israel, and Jordan.

According to multiple sources, it would buy 1.2 million tonnes of Potash from Canada, 600,000 tonnes from Israel, and 300,000 tonnes from Jordan in 2022 to partially replace supplies from Russia and Belarus.

According to a senior industry official who declined to be identified, IPL is attempting to guarantee that "a large proportion of shipments" arrive before June to avoid shortages during the planting season.

During Mandaviya's visit to Moscow later this month, India was on the verge of signing a three-year fertilizer import agreement with Russia. The visit was postponed following the Ukraine invasion, which began on Feb. 24.

According to one of the sources, India may try to sign the agreement again "when the situation improves."

Traditionally India has used prices struck in deals with Belarus and Russia as the benchmark for supplies from other countries. For 2022, Canada has emerged as a price setter, the sources said.

In 2022, IPL will purchase potash from firms in Canada and Israel for $590 per tonnes supplied with six months' credit. IPL refused to comment.

India also relies on Russia and Belarus for complex fertilizers that include many crop nutrients.

According to the sources, Indian industries are expanding supply from Saudi Arabia and Morocco to help compensate for any lost nitrogen, phosphate, and potash supplies.