The Indian government has announced that three companies - IPL, KRIBHCO and CIL - have signed 5-year supply agreements with Saudi Arabia's Maaden to import 3.1 million tonnes (mt) of diammonium phosphate (DAP) every year for five years beginning 2025-26.
The agreements also allow expansion of items to include urea in the future, as well as extension for another 5 years after the expiry of the current term on mutual consent.
The announcementcomes amid a shortage of diammonium phosphate (DAP) and urea during the ongoing Kharif sowing season, as reported by States.
Fertilizer security
"Both sides underscored their commitment to broadening the scope of bilateral relations to include other key fertilizers, such as urea, along with DAP, aiming to further ensure India's fertilizer security," an official statement said.
Union Fertilizers Minister J P Nadda, who arrived on Monday from Saudi Arabia, was present at the event where the MoUs were signed. He led a high-level delegation including the Secretary and other senior officials from the Department of Fertilizers, the statement said. A joint team has been set-up under Secretary (Fertilizer) on the Indian side and Vice Minister for Mining Affairs on the Saudi side to further explore long-term collaboration in fertilizer sector.
On July 12, the Indian delegation led by Nadda visited Maaden's Phosphate production facilities at Ras Al Khair.
In 2024-25, India's imports of DAP fertilizer from Saudi Arabia were 1.9 mt, a 17 per cent increase over 1.6 mt during 2023-24, the Fertilizer Ministry said. India's total DAP import in 2024-25 had dropped 17 per cent to 4.57 mt from a year ago. But, imports during April-May of the current fiscal dropped 38 per cent to 0.53 mt, further creating pressure as the opening stock on April 1 was lowest at 0.9 mt in last several years.
Opposition plan
Industry sources said that DAP sales during April-June quarter of the current fiscal dropped more than 18 per cent to less than 1.6 mt against 1.93 mt in the year-ago period. Though the government has been claiming adequate availability, the drop in sales has to be seen in the context of urea sales rising by 10 per cent, complex by 31 per cent, and MOP by 120 per cent in the same period.
The government has estimated DAP demand for July at 1.13 mt, which is 0.1 mt higher than actual sales happened in the year-ago period.
Meanwhile, as Opposition Congress has decided to raise DAP shortage in the Chhattisgarh assembly, Chief Minister Vishnu Deo Sai reportedly said that the state was experiencing slight shortage of DAP, and tried to downplay the issue by commenting that it is not the only state which is facing shortage. "The consumption of DAP (in India) exceeds its production. Our agriculture department is promoting complex (mixture of N,P,K nutrients) as an alternative. We will ensure that there is no shortage of DAP," Sai had said July 13.
Punjab, Telangana, Rajasthan, Uttar Pradesh and many other states have raised the concern over fertilizer shortage, mainly DAP and Urea in the current Kharif sowing season.
In April, businessline reported that the government might find it hard to meet DAP demand as the gap was estimated at 4.8 mt (5.7 mt demand against 0.9 mt opening stock) in Kharif 2025. Last year, the domestic production and import together had generated an availability of only 2.2 mt during April-September.
