Disrupted Specialty Fertilizer Exports from China Affect India's Agricultural Supply Chain
China Stops Exporting Specialty Fertilizers to India, According to a Report on Uncommon Minerals Exports
In a twist that could rattle India's agricultural supply chain, China has ceased shipping specialty fertilizers to India for the past two months, as per reports from top executives of several importers to Economic Times. These fertilizers are crucial for increasing yields of high-value crops like fruits, vegetables, and other profitable crops.
"For the past four to five years, China has been curbing suppliers of specialty fertilizers to India. However, this time it's a complete halt," said Rajib Chakraborty, President of the Soluble Fertilizer Industry Association (SFIA).
The Problem with Chinese Inspections
Shipments from factories are subject to inspections by the Chinese government. According to a report by the publication that cited people familiar with the matter, China has not been inspecting shipments destined for India, employing various procedures to halt exports without invoking any express ban.
The Importance of Specialty Fertilizers
Specialty fertilizers account for nearly 80% of India's imports and consist of non-subsidized soil nutrients such as water-soluble fertilizers (WSFs), liquid fertilizers for foliar and fertigation, controlled release fertilizers (CRFs), slow-release fertilizers (SRFs), micronutrient fertilizers, fortified fertilizers, customized fertilizers, nano fertilizers, bio-stimulants, organic and other value-added and innovative fertilizers.
Gaining popularity due to their ability to deliver targeted nutrients and reduce environmental impact, these products are increasingly replacing primary fertilizers, thereby boosting their consumption volume.
Can India Ramp Up Local Production?
According to industry estimates, India typically imports 150,000-160,000 tonnes of specialty fertilizers in the June-December period. Despite the rising domestic demand, as indicated by data from the Fertilizer Association of India (FAI), that the market for micronutrient fertilizers in India is expected to cross $1 billion by 2029, local production remains unprofitable.
India does not currently possess the technology to produce these fertilizers on a large scale, due to previously low volumes that made it commercially impractical for companies to invest in local manufacturing facilities. However, specialty fertilizers are now replacing primary fertilizers, thus increasing their consumption volume.
In response, numerous Indian companies like Deepak Fertilizers, Paradeep Fertilizers, and Nagarjuna Fertilizer Company are showing interest and are planning to establish manufacturing units in this segment.
Beyond this, China has also been curtailing the export of key raw materials, such as rare earth magnets, in apparent retaliation for tariffs and other barriers.
[1] India could become self-reliant in specialty fertilizer production amid growing domestic demand and strategic industry interest.[2] India's heavy reliance on China for specialty fertilizer imports is being impacted by global tensions and trade curbs, creating an urgent need for alternative sources or local production.[3] Rapidly growing specialty fertilizer market in India and the shift towards these fertilizers from primary fertilizers due to their environmental benefits could provide opportunities for Indian companies to establish manufacturing units and reduce dependency on China.[4] The Indian fertilizer sector has shown progress in capacity utilization and energy efficiency, indicating its potential to adopt new production technologies for specialty fertilizers.[5] India is exploring potential alternative import sources such as Jordan and Europe and experiencing logistical challenges in maintaining a steady supply due to the halt in Chinese exports.
- The halt in specialty fertilizer exports from China has highlighted the necessity for India to become self-reliant in production, as the domestic demand grows and strategic industry interest rises.
- The shift in the Indian fertilizer market towards specialty fertilizers, driven by their environmental advantages and increasing replacing of primary fertilizers, presents a significant opportunity for Indian companies to establish local manufacturing units, thereby reducing dependence on China.
