Daijiworld Media Network – New Delhi

New Delhi, Mar 11: Several urea manufacturers in India and Bangladesh have shut down plants or advanced annual maintenance schedules after supplies of liquefied natural gas (LNG) from Qatar were suspended amid the ongoing Iran–Israel conflict escalation, affecting a key feedstock used in fertilizer production.

Manufacturers, including leading producer Indian Farmers Fertiliser Cooperative Ltd., have either halted operations at some facilities or begun routine maintenance earlier than planned, people familiar with the matter said. Restarting a paused plant could take up to a month, provided LNG supplies resume, they added.

LNG is the primary feedstock for urea production, serving both as an energy source and a crucial input in manufacturing the world’s most widely used fertilizer. Gas supplies to India’s fertilizer sector are currently about 70 per cent of its requirement, according to the sources.

A prolonged disruption in LNG supplies could force India — the world’s largest importer of urea — to increase purchases from the global market, potentially pushing up international prices and complicating government efforts to reduce fertilizer subsidies. Fertilizer demand typically peaks during the monsoon season beginning in June.

Higher input costs could also influence crop prices and broader inflation, as India is the world’s largest producer and exporter of rice and the second-largest producer of wheat, cotton and sugar.
The government has taken measures to ensure that fertilizer manufacturers receive at least 70 per cent of their average LNG requirements during the disruption caused by tensions in West Asia, a spokesperson for the fertilizer ministry said.

Official data showed that fertilizer stockpiles, including urea, stood at about 18 million tonnes as of March 10, nearly 37 per cent higher than the level recorded a year earlier.

Meanwhile, countries including Thailand, Bangladesh, India and Vietnam have entered the spot market to secure short-term LNG supplies. However, some tenders for this month issued by GAIL (India) Limited and Gujarat State Petroleum Corporation reportedly went unawarded, indicating a shortage of readily available fuel.

In Bangladesh, the Bangladesh Chemical Industries Corporation has shut four of its five urea plants due to gas rationing, according to director Mohammad Moniruzzaman.

India’s fertilizer sector relies heavily on LNG imports, a significant share of which comes from West Asia, according to the Fertiliser Association of India. The industry is working with the government to prioritise gas allocations to maintain urea production.

According to the association, India’s fertilizer production and imports — including urea, di-ammonium phosphate and potash — rose to 65 million tonnes in the 10 months ended January 31, compared with 57 million tonnes in the same period a year earlier. It added that strong domestic output and timely imports have so far ensured adequate supply to meet farmers’ demand.