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Fertiliser stocks rallied sharply on Tuesday after Russia assured India of uninterrupted supplies of fertilisers amid the ongoing US-Iran conflict.
Fertilizers and Chemicals Travancore jumped 10%, while Madras Fertilizers gained over 9%. Rashtriya Chemicals and Fertilizers rose nearly 8%. Paradeep Phosphates and National Fertilizers climbed more than 5% each, while Chambal Fertilisers gained 3%.
What exactly happened: Russian President Vladimir Putin assured External Affairs Minister S Jaishankar to meet the needs of Indian farmers and was ready to increase supplies further.
This came as the conflict in West Asia disrupted global energy and trade routes. Fertiliser production depends heavily on natural gas, while India also imports large quantities of finished fertilisers and raw materials. Any disruption can increase costs and affect availability ahead of important sowing seasons.
The India-Russia connection: Russia has become an important fertiliser supplier to India, particularly since 2022. As Western sanctions disrupted Russia’s traditional trade routes, Moscow offered fertilisers to countries such as India at competitive prices.
This helped India secure supplies when global fertiliser prices were elevated following the Russia-Ukraine war. Russia also emerged as a major source of products such as urea, DAP and NPK fertilisers, helping India reduce some of its dependence on suppliers in China and West Asia.
Why it matters: India protects farmers from sharp price increases by subsidising fertilisers. However, expensive imports and higher LNG prices are increasing that burden.
The government has already spent around ₹99,000 crore on fertiliser subsidies in the first four-and-a-half months of FY27. That is nearly 56% of its ₹1.77 lakh crore annual allocation.
Russia’s assurance reduces the immediate risk of shortages and offers some visibility on supplies. That is why investors rushed into fertiliser stocks even as the broader market remained muted.
