By Admin 
Iran-Israel War: The result of the tension in the Middle East due to the war between Iran and Israel is that fertilizer manufacturing companies in India are cutting down production. According to media reports, people related to the matter, on the condition of anonymity, said that some big companies like Indian Farmers Fertilizer Cooperative Limited are reducing the production in their urea plants. Prolonged interruption in the supply of Liquefied Natural Gas (LNG) may force companies to close their facilities.
What is the connection between urea and LNG?
The importance of LNG as a raw material in the production of urea is very high. LNG is used not only as raw material to make urea, but also as fuel to run heavy machinery. In such a situation, ‘Force Majeure’ was declared after Iran’s attack on Qatar’s Ras Laffan plant.
‘Force majeure’ is a legal term, which means circumstances over which humans have no control, such as natural disaster or war situation. When a company declares ‘force majeure’, it means that it will not be able to fulfill its contracts due to the prevailing circumstances and no penalty will be imposed on it in case of failure to deliver supplies.
What is the matter of concern for India?
India imports 40-45 percent of its requirement of LNG from Qatar and about 80 percent of urea production in India is dependent on LNG. In such a situation, the reduction in supply is affecting the commodity market, due to which prices are increasing and major economic concerns have arisen.
According to a company notice obtained by Bloomberg, Pakistan’s Sui Northern Gas Pipelines Limited has also told customers that due to the war in the Middle East, it will not be able to supply regasified LNG to its fertilizer plants. The country gets most of its LNG from Qatar and this ban will come into effect from Wednesday midnight.
Without commenting on the cut in urea, a senior official of India’s Fertilizer Ministry said that the geopolitical situation is being continuously monitored and there is no shortage in gas supply as of now. According to Suresh Kumar Chaudhary, Director General of Fertilizer Association of India, there is enough stock to meet the demand soon. “We have full hope that the war can end soon,” Chaudhary said in an interview on Tuesday. “If the war continues, it will be a matter of concern for us,” he said without giving further details.
Another matter of concern is that this crisis hit India just before the sowing of Kharif season. In such a situation, if there is a hindrance in the availability of fertilizers, the prices will be affected.
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