Landed sulphur prices in India have doubled since January to around $900-1,100 per tonne, according to industry estimates. The surge has been driven by disruptions and uncertainty around oil refining and natural gas processing infrastructure amid the West Asia and Russia-Ukraine conflicts, as well as higher shipping and logistical risks.
However, industry officials and analysts believe the immediate problem is increasing input costs, not a shortage of fertilisers.
“Availability itself is less at risk than cost pass-through and margin compression,” says Rahul Mirchandani, President, Indian Micro-Fertilizers Manufacturers Association (IMMA), and CMD, Aries Agro Ltd. He indicates that companies are expected to focus on maintaining production continuity, particularly due to the critical need for fertiliser availability during the kharif and rabi seasons. However, sustained high sulphur prices may ultimately lead to selective plant curtailments or changes in the product mix.
Sulphur is a key ingredient for fertiliser manufacturing. First, it is converted into sulphuric acid, which is then used to process rock phosphate into phosphoric acid and subsequently into DAP and other phosphatic fertilisers. Sulphuric acid is also directly used in the manufacturing of SSP. “Sulphur is critical to the production of sulphuric acid, which is used for the conversion of rock phosphate to phosphoric acid and finally to DAP and other fertilisers,” says Sandeep P., Director, CareEdge Ratings.
Around 0.18-0.20 tonnes of elemental sulphur are required to produce one tonne of DAP. Any sustained constraint in the availability of sulphur or sharp increase in its price can, therefore, raise the cost of domestic production, explains Sandeep.
ET OnlineIndia, the world’s second-largest user and the third-largest producer of fertilisers, imports more than half of its sulphur requirement, with the remainder coming from domestic refineries. However, sulphur imports have slowed significantly during May-June 2026, as per data.Rock phosphate security only solves part of the problem
The sulphur shock has also highlighted a vulnerability in India’s strategy of securing overseas rock phosphate resources. “Rock phosphate security without matching sulphur or sulphuric acid security is only half the input chain issue solved,” Mirchandani says.
He suggests that India considers long-term offtake contracts with major sulphur exporters, strategic inventories at ports and fertiliser plants, incentives for greater domestic sulphur recovery and integrated overseas ventures involving rock phosphate, sulphuric acid and phosphoric acid.
A dedicated strategy could become more important because most global sulphur is not produced through conventional mining. Only around 10% of global sulphur production is directly mined, while roughly 90% is recovered as a by-product of petroleum refining and natural gas processing, according to industry estimates.
ET OnlineAs India expands its refining capacity, Sandeep believes greater sulphur recovery from domestic refineries could improve domestic availability.
Aditya Sesh, member of the expert committee on National Warehouses of Agriculture, Ministry of Agriculture and Farmers Welfare, says India should adopt an integrated strategy covering elemental sulphur, sulphuric acid and smelter acid.
He suggests diversified long-term overseas contracts, equity or offtake arrangements with major producers, improved port-handling infrastructure, and strategically located rolling inventories. “Securing rock-phosphate mines overseas does not, by itself, provide fertiliser security unless India also secures sulphur and processing inputs,” Sesh says.
He also proposes reassessing domestic sources such as pyrite while expanding sulphur and sulphuric-acid recovery from refineries, gas-processing facilities, and metal smelters.
Govt may have to absorb much of the shock
The rise in sulphur prices could have direct implications for the government’s fertiliser subsidy bill.
Under the Nutrient Based Subsidy (NBS) system, subsidy rates for phosphatic and potassic fertilisers are determined according to nutrient content rather than the actual cost of each raw material used in manufacturing. “This means a sharp increase in elemental sulphur prices is not directly compensated through the NBS mechanism,” says Sandeep.
The NBS includes a sulphur nutrient subsidy. For Rabi 2025-26, the sulphur nutrient subsidy was Rs 2.87 per kg, and for Kharif 2026, it was Rs 3.16 per kg, says Sandeep. However, this subsidy applies to the sulphur nutrient contained in the finished fertiliser and does not automatically rise when the market price of elemental sulphur increases.
“The additional burden has to be borne by the government,” Sandeep says, adding that the government has historically used subsidies and other policy interventions to cushion farmers from volatility in fertiliser and intermediate prices.
The industry has been seeking further revision or pass-through support as input costs have risen.
Mirchandani says that in the short term, fertiliser companies could absorb part of the increase through lower margins if retail prices remain unchanged. But prolonged high sulphur prices without a corresponding subsidy revision would put increasing pressure on manufacturers.
iStockThe industry has been seeking further revision or pass-through support as input costs have risen.
“Companies will lose margins to keep end prices affordable, but still it will put an additional burden on the farmers and the government through higher subsidies,” says Rajib Chakraborty, National President, Soluble Fertilizer Industry Association (SFIA).
Meanwhile, the government is considering differential DAP subsidies under the NBS scheme, as surging sulphur prices push up domestic manufacturing costs, according to a report by The Economic Times. Subsidy could vary depending on whether DAP is produced locally from imported rock phosphate or phosphoric acid, or imported as finished fertiliser, with rates linked to floor prices for imported inputs, the report said.
Notably, for 2026-27, the government has budgeted Rs 1.71 lakh crore for fertiliser subsidies, down from the Rs 1.76 lakh crore Budget Estimate for 2025-26, while the revised estimate for 2025-26 stood at Rs 1.76 lakh crore. The allocation covers subsidies for both urea and nutrient-based fertilisers (NBS). The Budget Estimates for 2025-26 had provisioned Rs 1.19 lakh crore for urea subsidy and Rs 49,000 crore for NBS.
However, experts believe that the rising global fertiliser costs due to a supply crunch are likely to push India’s fertiliser subsidy burden significantly higher than the Budget Estimates.
Import prices could remain volatile
Industry estimates put the current landed cost of sulphur in India in a broad range of $900-1,100 per tonne, depending on grade and shipment, with some estimates placing the current level around $1,050 per tonne.
“Landed CFR (Cost & Freight) prices are currently hovering around $900-960 to $1,060 per tonne for granular, lump, and crushed sulphur,” notes Chakraborty. In international trade, Landed CFR means the seller’s price includes the cost of goods, freight to the destination port, and unloading charges.
For sulphuric acid, Sandeep estimates the landed cost at around $320 per tonne towards the end of June, while Chakraborty puts landed CFR prices at about Rs 37,500 per tonne, with Indian-origin materials available at around Rs 32,000 per tonne ex-factory.
As per Mirchandani, the price of 98% sulphuric acid is currently around Rs 36-40 per kg.
Further price increases cannot be ruled out if geopolitical disruptions intensify, say industry executives, even as they highlight the prevailing record high sulphur prices in the domestic market. “Prices are high and stable at the moment; it may not increase if there are no further developments in the Middle East,” Chakraborty says.
Mirchandani says import prices could also rise because of higher ocean freight and logistical disruptions but adds that sulphur prices could decline by November-December if geopolitical stability is restored.
China, Russia restrictions add to uncertainty
Supply-chain disruptions involving Russia and China are adding another layer of uncertainty.
Mirchandani says China has periodically tightened controls on phosphate and related fertiliser exports, although such measures are not necessarily specific to sulphur. China’s own demand from its phosphate industry also competes with exportable sulphur supplies.
Chakraborty says export restrictions by China and Russia on sulphur and sulphuric acid have contributed to the global squeeze.
Experts say that supply disruptions have also been compounded by logistical bottlenecks and uncertainty over vessel movements through the Strait of Hormuz, an important route for sulphur shipments to India. They say export restrictions on sulphuric acid by countries including Russia and China have also affected international availability and pricing.
India has nevertheless been diversifying its sourcing. Companies have been looking at suppliers in Canada, Japan and other Asian markets to reduce dependence on individual supply sources, says Mirchandani.
No immediate shortage, but prolonged shock could hurt
Chakraborty says India’s annual sulphur demand is around 3.4-3.8 million tonnes, while consumption could be around 4.4 million tonnes, with imports estimated at 1.5-2 million tonnes and exports at around 1.2-1.5 million tonnes.
He says west coast refineries export around 0.8-1 million tonnes, suggesting that domestic availability could be managed by redirecting supplies if a shortage emerges.
India’s principal import sources include the UAE, Qatar, Oman and Kuwait, he said, adding that east-coast supplies could also be used if required.
The immediate risk, therefore, may be less about fertiliser availability and more about the economics of production, says a promoter of a major company that processes spent acid.
A prolonged sulphur shock could reduce operating margins, affect plant utilisation, and increase dependence on imported finished fertilisers. SSP producers could be particularly exposed because of relatively thin margins, he adds.
A prolonged price shock will force a tough call—higher support for manufacturers, higher retail prices, or a mix of squeezed margins, and a bigger subsidy bill, experts say. They also flag a wider gap in fertiliser security, i.e., rock phosphate alone is not enough if sulphur and sulphuric acid remain exposed to disruption.