The ongoing war between Russia and Ukraine could also affect the agricultural sector. Fertilizers in the country are now likely to cost more than before. Potash is required for the production of fertilizers and potash is widely imported in India. Russia and Belarus are the largest exporters of potash. However, the ongoing war between Russia and Ukraine has threatened the supply of potash. Ukraine also exports potash. Russia, Ukraine and Belarus account for 10 to 12 per cent of India's total fertilizer imports. Prior to the war, India had planned to import Belarusian potash from Russian ports, but the plan was thwarted by sanctions.
Besides, it is understood that other potash producing countries like Canada are not ready to increase their production. That is why its prices are rising in the world market. Rising fertilizer prices may require further subsidies from the central government. In the current financial year, imports of potash continued at a rate of about 280 dollar per metric tonne but due to the supply crisis, its price could go up to 500 to 600 per metric tonne. ICRA research chief Rohit Ahuja said sanctions imposed on Russia and Belarus would exacerbate the supply crisis. The government will now have to provide more subsidies to farmers to provide fertilizers at lower rates.
The Russia-Ukraine war will have a major impact on fertilizer imports. Payments and logistics will hamper its imports, said Nitesh Jain, director, Crisil Ratings. Also, Pallavi Bhati, senior analyst at India Ratings and Research, said that Russia is a big exporter of fertilizers, so import prices are likely to rise sharply. Apart from this, the price of gas required for urea production has also gone up, which will also affect the price of fertilizer.