Fertilizer manufacturers in India are beginning to cut output after Qatari liquefied natural gas (LNG) supplies, a key feedstock, were suspended due to hostilities in the Middle East. Companies like Indian Farmers Fertiliser Cooperative Ltd. (IFFCO) have started reductions at certain urea plants, according to sources. Prolonged disruption may force further shutdowns, though details remain scarce. LNG serves as both an energy source and a critical input in urea manufacturing, making the supply halt particularly damaging. India's production cuts come as rising prices for other fertilizer inputs like ammonia and sulfur compound the problem, threatening higher production costs and potential price hikes for farmers.

The supply disruption ripples through commodities markets, raising broader economic concerns. Pakistan’s Sui Northern Gas Pipelines Ltd. also notified customers of halted regasified LNG deliveries starting Wednesday, as Qatar provides most of the country’s supply. While India’s fertilizer ministry states no current gas shortage exists and stockpiles are sufficient for the near-term, the situation is being closely monitored. Director General of the Fertiliser Association of India, Suresh Kumar Chaudhari, expressed optimism the war might end soon but warned if the cuts last, India could face costly imports ahead of peak agricultural demand during the June monsoon season. This could complicate New Delhi’s efforts to control fertilizer subsidies and its fiscal deficit target.

India, the world’s largest rice grower and top sugar, wheat, and cotton producer, relies heavily on urea. Expensive imports would derail planned subsidy reductions in the budget, potentially increasing government spending and complicating economic policy. The geopolitical situation remains a critical factor for global fertilizer supply chains and agricultural economics.