Fertiliser Stocks Rally Up To 13% After Russia Assures India Of Supplies

Shares of fertiliser companies rallied sharply on Tuesday, bucking muted broader market sentiment, after Russian President Vladimir Putin assured India of uninterrupted fertiliser supplies amid disruptions caused by the conflict in the Middle East.

Fertilisers and Chemicals Travancore (FACT) led the gains, with its shares rising as much as 13% to cross ₹887 apiece in morning trade. Rashtriya Chemicals and Fertilisers (RCF) gained around 8%, while Paradeep Phosphates rallied more than 7%. Chambal Fertilisers & Chemicals shares advanced around 4%.

The gains came after Putin assured External Affairs Minister S Jaishankar that Russia would continue meeting India's energy and fertiliser requirements.

Russia Assures India Of Fertiliser Supplies

Putin on Monday assured India of uninterrupted supplies of energy and fertilisers during his meeting with Jaishankar.

"We are doing everything we can to fully meet the needs of Indian farmers and the agricultural sector, increasing these supplies and stand ready to continue doing so," Putin was quoted as saying by state-run TASS.

The assurance comes at a critical time for India's fertiliser supply chain, with the conflict in the Middle East disrupting global trade and pushing up prices of key inputs.

Putin also highlighted the depth of Russia-India ties, saying cooperation between the two countries covered virtually all areas, including government, parliamentary and business engagement.

Jaishankar, meanwhile, said Prime Minister Narendra Modi looked forward to meeting Putin at the SCO summit and hosting him in India for the BRICS Summit.

Fertiliser Subsidy Spending Rises

The supply assurance comes as higher global prices of finished fertiliser products and LNG have increased pressure on India's fertiliser subsidy bill.

The government has already used around 56% of its annual fertiliser subsidy allocation in less than five months of FY27, with expenditure reaching around ₹99,000 crore, according to a Times of India report.

The spending has raised expectations that the government's total fertiliser subsidy expenditure could exceed the FY27 budget estimate of ₹1.77 lakh crore.

A significant portion of the subsidy is being used for urea imports and domestic production, as higher international input costs increase the financial burden on the government.

The development also follows a sharp decline in India's production and imports of NP/NPK fertilisers during the April-June quarter.

Middle East Conflict Raises Input Cost Pressure

Production of complex NP/NPK fertilisers fell 28% year-on-year to 19.2 lakh tonnes in the April-June quarter from 26.64 lakh tonnes a year earlier, according to industry officials citing Fertiliser Association of India data.

Imports declined even more sharply, falling 48.5% to 4.9 lakh tonnes from 9.54 lakh tonnes during the same period.

The decline came as the Middle East conflict pushed up prices of key raw materials, raising concerns over fertiliser availability during the ongoing crop-sowing season.

In April, the government approved a 10-21% increase in nutrient subsidy rates for the 2026 kharif season, taking the total subsidy outlay to ₹41,534 crore.

However, fertiliser manufacturers have argued that the increase has been overtaken by subsequent rises in global input costs.

Against this backdrop, Russia's assurance of continued fertiliser supplies has eased some concerns around availability and supported fertiliser stocks in Tuesday's trade.