Industry Odisha Bureau, Sep 25: Sulphur costs have roughly doubled since January, putting India’s fertiliser sector under pressure. DAP and SSP makers face squeezed margins. Prolonged high prices could threaten higher subsidy spending.
A Raw-Material Shock, Not a Shortage
India’s fertiliser plants are not short of supply today. Making phosphatic fertilisers, however, has become far costlier.
Landed sulphur prices have roughly doubled since January, industry estimates show. Most estimates place them around $900-1,100 per tonne. Some put current levels near $1,050 per tonne. Rising sulphur costs lift production expenses for DAP, SSP and complex fertilisers.
Why Sulphur Matters for DAP Production
Sulphur sits early in the phosphatic fertiliser chain. It is first converted into sulphuric acid. That acid turns rock phosphate into phosphoric acid, which then feeds DAP production. SSP makers use sulphuric acid directly. Each tonne of DAP needs around 0.18-0.20 tonnes of elemental sulphur.
Sulphur Imports Raise India’s Exposure
India imports more than half its sulphur requirement. Domestic refineries supply much of the rest. Imports slowed significantly during May-June 2026.
Only about 10% of global sulphur is directly mined. Roughly 90% is recovered from petroleum refining and natural-gas processing. Supply therefore depends heavily on energy-sector activity.
Disruptions in West Asia and the Russia-Ukraine conflict have added uncertainty. Experts also cite vessel uncertainty around the Strait of Hormuz, a key route. Industry executives say Chinese and Russian restrictions on sulphur and sulphuric acid squeezed supply.
Companies are exploring suppliers in Canada, Japan and other Asian markets. Traditional sources include the UAE, Qatar, Oman and Kuwait.
Fertiliser Security Beyond Rock Phosphate
Overseas rock phosphate alone cannot secure DAP supply. Industry voices want an integrated strategy covering sulphur and sulphuric acid. Proposals include long-term offtake contracts, strategic inventories and better port handling. Others urge more sulphur recovery from refineries, gas plants and metal smelters. Some suggest reassessing domestic pyrite resources. These remain suggestions, not adopted policy.
Nutrient Based Subsidy Faces the Cost Test
The subsidy framework adds pressure. Under the Nutrient Based Subsidy system, support depends on nutrient content. It does not track individual raw-material costs.
The sulphur nutrient subsidy was ₹2.87 per kg for Rabi 2025-26. It stood at ₹3.16 per kg for Kharif 2026. Neither rate moves with elemental sulphur prices.
The government budgeted ₹1.71 lakh crore for fertiliser subsidies in 2026-27. That compares with ₹1.76 lakh crore budgeted for 2025-26. Experts say prolonged high costs could threaten higher subsidy spending.
Economics, Not Availability, Is the Near-Term Risk
Companies may absorb some costs through thinner margins in the short term. A prolonged shock could hurt plant utilisation. It could also raise reliance on imported finished fertilisers. SSP producers look especially exposed because of thin margins.
The Whole Chain Matters
India’s fertiliser security now depends on the whole processing chain, not one mineral. Sulphur has become the link that needs attention.
