In 2025, global fertiliser trade finds itself at the crossroads of geopolitical tension, currency fluctuations, shifting demand patterns, and growing government interventions. The India Fertilisers Market size is estimated at $45.89 billion in 2025, and is expected to reach $62.83 billion by 2030, thus growing at a CAGR of 6.49 per cent during 2025-2030. For importers and international traders, especially those eyeing India, the world’s largest fertiliser importer, understanding the changing dynamics is not just beneficial, but essential for survival.

India: The giant buyer in a growing market

India’s fertiliser market is massive and growing steadily at 6–7 per cent annually. With a population of over 1.4 billion and increasing pressure on land productivity, the demand for fertilisers continues to surge. However, despite its agricultural strength, India remains significantly dependent on imports for key nutrients:

● Urea: Although India is pushing for self-sufficiency, urea remains heavily subsidised and partially imported. The government is investing in new domestic plants and promoting nano urea to reduce import dependence.

● Phosphatic Fertilisers: India has just one operational phosphate mine in Rajasthan, producing 800,000 tonnes annually, less than 10 per cent of its 9 million tonne requirements.

● Potash (MOP & SOP): India lacks any natural potash reserves and relies entirely on imports to meet demand.

This import-heavy structure makes India highly sensitive to price fluctuations, geopolitical dynamics, and freight volatility creating a challenging but lucrative space for traders.

Why are prices volatile in 2025?

Several key factors continue to drive fertiliser price instability globally:

1. Geopolitical disruptions

The Russia–Ukraine war continues to impact fertiliser exports, especially potash and nitrogen-based products. Sanctions, export duties, and shipping bottlenecks have collectively disrupted supply chains. This has led to price spikes in global benchmarks, affecting CIF costs for Indian importers.

2. Currency exchange pressures

Fertiliser imports are dollar-denominated, while sales to Indian farmers happen in INR. The weakening of the rupee from ₹80 to ₹86 per dollar has made imports more expensive. For traders, this exchange rate movement significantly reduces pricing flexibility unless hedged through forex risk management tools.

3. Rising freight costs

Container shortages and fluctuating bunker fuel prices continue to impact global logistics. As freight charges rise, so does the landed cost of fertiliser, particularly for long-haul imports.

4. Government subsidies & controls

Fertiliser remains the second-most subsidised sector in India after petroleum. While subsidies offer price protection to farmers, they also result in high levels of regulatory oversight. The government actively manages import volumes and incentivises local production. Traders must stay closely aligned with policy directions, including tenders, quality norms, and subsidy coverage changes.

5. Government interventions

National policies play a significant role in shaping the 2025 fertiliser market. China’s ongoing restrictions on fertiliser exports to protect its domestic agricultural sector continue to limit global supply. Conversely, India’s substantial fertiliser subsidy program creates surges in demand, impacting international prices.

6. Natural gas prices

Natural Gas is the key raw material used in the production of fertiliser. It is used as feedstock to produce ammonia, which is key ingredients for many fertilisers. Henceforth, the cost of natural gas acts as a pivotal role for the fertiliser industry. Natural gas prices in 2025 soared to their highest levels in two years, driven by a combination of extreme weather, supply constraints, record liquefied natural gas (LNG) exports, and global demand pressures. The increase in the natural gas price turns into higher production costs and, consequently, higher fertiliser prices.

7. Supply and demand imbalances

Global demand for fertilisers is expected to remain strong, driven by the growing need for food security amid a rising global population. However, supply may not keep pace due to several challenges, including production slowdowns, logistical disruptions, and geopolitical or policy-related constraints. This imbalance between demand and supply can lead to surge in price.

What does this mean for traders and importers?

For traders navigating the Indian market in 2025, the landscape demands both agility and precision. Here’s what you need to keep in mind:

1. Competitive pricing is non-negotiable

Indian farmers are price-sensitive. With input costs rising, they are actively shifting to lower-cost alternatives such as NPK blends and Single Super Phosphate (SSP) instead of premium fertilisers like DAP. Traders must ensure that the final cost post-import duties, freight, and forex is viable for the local market.

2. Strategic sourcing & forward contracts

Diversification of sourcing from multiple geographies and forward contracting have become crucial. Locking in rates and volumes in advance not only helps hedge against price fluctuations but also ensures supply continuity during periods of global disruption.

3. Inventory management

Volatile pricing makes inventory management a delicate balancing act. Excess stock during price drops can lead to losses, while undersupply during price spikes leads to missed opportunities. Real-time market intelligence and demand forecasting tools are now essential for traders.

4. Shift toward nano & alternative fertilisers

With the government promoting nano fertilisers as a sustainable, cost-efficient solution, traders must watch for how adoption scales. While traditional fertilisers dominate today, shifts in farmer preference and government policy could redefine product mixes within the next few years.

5. Regulatory compliance and policy tracking

From quality certifications to port clearance norms, importers must stay updated with frequent policy shifts. The government is increasingly encouraging local manufacturers to enhance production capacity. Traders supplying to Indian fertiliser companies must meet both technical standards and price competitiveness.

The bottom line: Be fast, flexible and forward-thinking

2025 is not a year for reactive trading. The fertiliser market particularly in India is influenced by a complex mix of economics, policy, and politics. Every container that enters the country must be backed by solid risk assessment, logistical planning, and cost control.

For global traders, the opportunity remains huge but so do the risks. Those who succeed will be the ones who can balance quality with affordability, act fast on global market signals, and stay aligned with local needs and realities.

The author is Founder Chairman – Tradelink International Pvt Ltd

Published on June 14, 2025