India Seeks Urea From China Amid War-Driven Gas Crunch

• India seeks urea imports from China amid gas shortage.
• War disrupts gas supply, forcing fertilizer plants to cut output.
• Global urea prices jump 21% amid supply concerns.

India has reached out to China with a request for urea supplies, as the shortage of natural gas caused by the war has led to the disruption of domestic fertilizer production. The plea is made against the backdrop of geopolitical tensions in the Middle East that have impacted the energy shipments and raised the price of gas, thereby posing a problem for fertilizer manufacturers in India.

Urea production is quite dependent on natural gas, which serves as the principal feedstock for fertilizer plants. As a result of the war-led disruptions in the global energy supply, many Indian producers are running short of gas. Some plants have already reduced their production or temporarily ceased their operations, which has prompted the government to consider other supply sources.

In order to compensate for the anticipated shortfall, Indian representatives have made a move to China to get permission for exporting urea shipments to India. As the largest producer of urea globally China however, exports under a quota system and the allocation of shipments for 2026 is still not widespread. The two sides are still negotiating, and the final decision on the export authorizations has yet to be made.

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Such a development is the main case of a report on how the Ukraine war poses a risk to the energy sector, but market changes and risks go beyond to commodity sectors as well. Fertilizer prices have been elevated sharply resulting in a 21% increase in urea price at the global benchmark.

It has reached the level of the highest price in more than three years during the early phase of the Ukraine conflict. India is the largest urea importer in the world. The government usually uses domestic production and imports to meet agricultural demand. The officials argue that there is currently no fertilizer shortage, however if there is a lengthening of disruption of gas supplies, then India might be compelled to increase imports prior to the monsoon planting season in June.

Other suppliers that at least help why supply can be additional ones are likely to be Russia Indonesia Malaysia, and Egypt for example. However, given its huge production capacity and closeness to the Asian markets, China is still very much a critical potential source.