India to Witness High Potassium Chloride Prices due to Feedstock Scarcity

After Russian President Vladimir Putin announced, ‘military operation’ in Ukraine on Feb. 24, the nation continues to fight against Russian forces, due to which the experts warn about the potential fallout of the Indian agriculture industry in the forthcoming period. As Russia and Belarus are among the two major exporters of Potassium Chloride (KCl), they will not be able to export the product in large quantities any sooner, given the ongoing war situation in both nations. Russia is the world’s leading natural gas exporter, which is further utilized to make nitrogen fertilizer and is the 3rd biggest producer of potash after Belarus. After the invasion, Russia faces several international sanctions, which has also impacted its closest ally i.e., Belarus, which combinedly constitutes more than 40 percent of the global potash market.

As India largely imports Potassium Chloride from Belarus and Russia, “the government would not be able to import fertilizers from the offshore markets for the upcoming farming season as promised,” according to spokesperson of the Movement for National Land and Agricultural Reform (MONLAR). As Per ChemAnalyst, the prices of Potassium Chloride are anticipated to witness a major surge in the Indian domestic market during the upcoming weeks on the back of the shortage of raw materials. An industry expert also mentioned, “a severe global shortage of fertilizer in the forthcoming years would seriously affect the food prices that are already soaring across the world.” The significant rise in food prices would always result in the unrest of domestic as well as international markets.

As the Yala season is approaching in India from May to the end of August, the Cabinet of Ministers has planned to import 38,500 metric tonnes of Muriate of Potash (Potassium Chloride) to provide it to the farmers under the government subsidy program, which will be hampered considering the situation. The low availability of inventories with the Indian traders amid high demand from the downstream markets could further exacerbate the Potassium Chloride prices in India. The prices of fertilizers have been witnessing windfall from the start of 2022 due to supply chain disruptions and technical difficulties at plants.