In the first quarter, India reported a notable reduction in nitrogen fertilizer purchases, shrinking by 35 percent year over year to reach 1.1 million tons. This development was covered by the newspaper Vedomosti, citing data from the Price Index Center (PIC) and reinforcing the broader trend in the country’s agricultural input market. The decline reflects shifts in international trade dynamics and domestic policy considerations that influence fertilizer demand and supply across the subcontinent.
Several factors contributed to lower fertilizer imports. A key driver has been the easing costs of liquefied natural gas (LNG), which underpins roughly 90 percent of India’s urea production. During the January–March period, energy costs fell by 26 percent, with the purchase price of energy dropping to 393 dollars per thousand cubic meters. Meanwhile, the domestic market price for gas stood at 286 dollars per thousand cubic meters as of the end of the first quarter, marking an eight percent decline on an annual basis. These energy cost reductions helped ease production expenses for fertilizer manufacturers and supported the move toward self-sufficiency in nitrogen inputs.
As a result of the lower input costs, the overall cost of fertilizer production in India decreased by 6 percent, landing at 246 dollars per tonne. This figure is about 84 dollars per tonne below the prevailing import price, illustrating a clear price gap that can influence both domestic producers and import decisions in the near term. The country remains the world’s largest market for nitrogen fertilizers, yet policymakers are actively pursuing strategies to reduce dependence on imports and bolster local production capacity. The ongoing shift toward domestic production could reshape the competitive landscape for fertilizer suppliers operating in India and affect procurement trends for large-scale buyers within the agricultural sector.
In related parliamentary developments, the State Duma took up a first reading of a bill proposing higher mining taxes on the extraction of essential commodities, including iron ore, coal, diamonds, gold, and fertilizers. The legislative move signals a broader fiscal agenda aimed at ensuring steadier revenue streams from natural resources, potentially affecting investment plans and price dynamics within the sector. Observers note that such tax measures, if enacted, could influence the cost structure of mining and related industries, feeding through to downstream markets that depend on these inputs.
Earlier, the EU reported the completion of the 14th sanctions package implementation against Russia, underscoring ongoing geopolitical considerations that intersect with global commodity markets. The sanctions framework continues to shape trade flows, pricing, and supply chains for energy, fertilizers, and other critical inputs, reinforcing the importance of monitoring international policy developments for market participants in both India and neighboring regions. This broader context helps explain some of the price movements and procurement decisions observed during the quarter, illustrating how policy and geopolitics can converge to affect domestic agricultural economics.