Why in the News
Escalating conflict involving Iran, Israel and the United States has disrupted trade routes and raised global energy prices. This has affected India’s rice exports and increased fertilizer prices such as urea and DAP.
Impact on India’s Rice Exports
- Suspension of Shipments
- Export of basmati rice to West Asia has been halted.
- Ships carrying rice are stranded at ports or at sea.
- Importance of West Asia for Basmati
- India exports about 6 million tonnes of basmati rice annually.
- 70–75% goes to West Asian markets.
- About 1 million tonnes exported to Iran alone.
- Major buyers include: Iran, Saudi Arabia, Iraq, and UAE
- Exports are usually highest between October and March.
Rising Shipping and Logistics Costs
- Ship fuel price jumped from $480 to $925 per barrel in a few days.
- Container and bulk vessel availability reduced.
- Exporters advised to avoid new CIF contracts and prefer FOB terms.
- Basmati wholesale prices have already risen 10–15%.
Fertilizer Prices Increasing
Global energy price rise has pushed up fertilizer costs.
- Urea
- Could exceed $1000 per tonne if conflict continues.
- Used extensively during India’s sowing season.
- DAP (Di-Ammonium Phosphate)
- Expected to rise from about $850 to $1000 per tonne (FOB).
Why Fertilizer Prices Are Rising
- Energy cost linkage
- Urea production depends heavily on natural gas and LNG.
- Supply concentration
- Morocco holds about 70% of global phosphate reserves.
- Canada and Belarus dominate potash production.
- War-related supply disruptions
- Transport and insurance costs rising.
Fertilizer Situation in India
- Urea sales (Apr–Dec 2025): 31.16 million tonnes (up 3.8%).
- Domestic production: 22.44 million tonnes (down 3%).
- Imports: 8 million tonnes (up 85.3%).
- India remains heavily dependent on fertilizer imports.
| [2019] Among the following, which one is the largest exporter of rice in the world in the last five years? (a) China (b) India (c) Myanmar (d) Vietnam |
