India’s production of urea — a widely used nitrogen fertilizer — will return to normal levels from Friday, as some idled plants restart operations following an improvement in natural gas supplies, according to people familiar with the matter.
Some manufacturers, including top producer Indian Farmers Fertiliser Cooperative Ltd., had shut a few of their facilities or undertaken routine maintenance as supplies of gas, a key feedstock, fell after disruptions linked to the Middle East conflict.
As a result, India’s urea production fell by about 800,000 tons in March, from a normal monthly level of more than 2.6 million tons, said one of the people, who asked not to be identified as they are not authorized to speak to the media. India is one of the largest consumers and the biggest importer of the crop nutrient.
A fertilizer ministry spokesperson didn’t immediately respond to an email seeking comment.
The government boosted gas flows for the sector to about 95% of average consumption, from around 70%–75% earlier, according to the oil ministry.
The improvement comes ahead of sowing of monsoon crops, such as rice, corn and soybeans, which typically starts in early June. Fertilizer, one of India’s most gas-intensive sectors, depends heavily on steady flows. A temporary ceasefire between the US and Iran agreed this week may improve supplies, but shipping through the Strait of Hormuz is still slow.
While Indian liquefied natural gas importers have been able to secure some supply from the spot market, buyers have struggled to replace the loss of volumes from major producer Qatar. The 30-day moving average for Indian LNG imports is down 27%, compared with this time last year, according to ship-tracking data compiled by Bloomberg.
Indian Potash Ltd., which procures urea for the government, issued a tender last week to import 2.5 million ton. India regularly imports urea through global tenders to meet domestic demand, but this is its first such purchase since the US-Israeli war on Iran, making the timing in focus.
–With assistance from Stephen Stapczynski.
Disclaimer: This report is auto generated from the Bloomberg news service. ThePrint holds no responsibility for its content.