Industry executives have indicated that fertiliser availability and prices may take another three to four months to return to normal, despite a tentative peace agreement between the United States and Iran and the expected reopening of the Strait of Hormuz. While the agreement is anticipated to ease pressure on global energy and shipping markets, the disruptions caused by the conflict in West Asia cannot be reversed immediately.
Natural Gas Supply Restoration Expected First
A senior fertiliser company executive stated that the first relief is expected from the restoration of natural gas supplies, noting that it takes time to restart plants and bring production back to normal levels. Several raw materials used in fertiliser production are petroleum derivatives, and supplies are likely to stabilise only after oil refineries resume full-scale operations.
Ammonia May Stabilise Soon, Sulphur Remains a Concern
Industry executives said ammonia prices, a crucial input for di-ammonium phosphate (DAP) production, could stabilise within one to two months after gas plants in Qatar return to normal operations. Imported ammonia is currently available in the domestic market. However, sulphur prices are expected to remain elevated for a longer period. Sulphur, a key raw material for DAP and a by-product of petroleum refining, has surged to record levels due to supply disruptions in West Asia and strong industrial demand. Wholesale sulphur prices are currently between $815 and $1,200 per metric tonne.
India has adequate urea stocks for the ongoing kharif season, but DAP supplies continue to face pressure because of the global sulphur shortage. Executives warned that sulphur prices could rise further before easing towards December.
Shipping Disruptions Continue to Impact Supplies
Industry executives also pointed to lingering logistical challenges despite the expected reopening of the Strait of Hormuz. Several vessels carrying urea and DAP to India were stranded during the crisis. Refineries and gas-processing facilities will require safety inspections, maintenance checks, staff mobilisation and stable logistics before returning to full capacity. A senior industry executive noted that reopening a shipping lane does not instantly clear stranded cargo; there will be a queue of vessels, port congestion, delayed berthing, inspection delays and insurance approvals. Shipping companies are also expected to remain cautious before fully restoring operations through the strategic waterway.
Strait Reopening Expected Under US-Iran Agreement
The concerns come even as a tentative agreement between the United States and Iran is expected to pave the way for the reopening of the Strait of Hormuz, a vital global energy route. Leaked versions of the interim agreement indicate that Iran would take immediate steps to reopen the strait once the deal is formally signed in Switzerland on Friday. The agreement is also expected to allow Iran to resume unrestricted oil sales while broader negotiations on its nuclear programme continue. The Strait of Hormuz, through which a significant share of global oil and natural gas trade passes, could return to pre-war traffic levels within 30 days under the proposed arrangement.
Industry experts believe the reopening will eventually improve the supply of energy-linked fertiliser inputs, but the benefits may take months to filter through global production and shipping networks.
