Russian companies have ceased offering discounted fertilizers, like di-ammonium phosphate (DAP), to India, marking a shift from last year when they were the country's largest suppliers. The change, which occurred in August, could increase India's import costs and subsidy burden as global fertilizer prices surge. China, a leading exporter, has been curbing overseas sales.
Instead of discounts, Russian companies are now offering fertilizers at market prices, which means India may pay more for its imports. In the 2022/23 financial year, India's fertilizer imports from Russia skyrocketed by 246% to a record 4.35 million metric tons, driven by discounts on DAP, urea, and NPK fertilizers. Russia's aggressive pricing last year eroded market share for other fertilizer exporters, including China, Egypt, Jordan, and the United Arab Emirates.
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Russian DAP now costs around $570 per ton for Indian buyers, the same price offered to other Asian buyers. Global fertilizer prices have surged in recent months, posing challenges for Indian companies as they prepare for the winter season, when DAP demand rises for wheat crops. Urea prices, for example, have jumped from $300 to $400 per ton on a CFR basis. This price increase coincides with crucial state elections in India, putting pressure on the government to increase subsidies to support farmers.
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