Farmers' earnings may come under pressure if West Asia exports stay stuck

Centre says India is sitting on 36.5 per cent more fertiliser stocks as on March 6, compared to last year; farmers fully insulated from global shocks

Even as Commerce Minister Piyush Goyal assured exporters that the Centre will use all resources at its disposal to help them deal with the West Asia crisis, farmers' groups say that if shipments of major export commodities remain stuck for a longer duration, it could impact growers' earnings, which have already been under stress this year due to low inflation.

 

Apart from basmati and bananas, which are already in the news for being stuck in ports, sources said around 300 containers loaded with grapes bound for West Asia are also stuck in ports, putting almost 6,000 tonnes at risk. 

That apart, 5,400 tonnes of onions from Nashik and around 8 million units of eggs destined for West Asia markets are at risk of spoiling or being damaged due to shipment delays. West Asia is a major destination for Indian eggs, with Oman, the UAE and Qatar being major buyers.

 

These export consignments bound for the Middle East could also have an impact on pulling down food inflation, which was showing some signs of moderation after being negative for seven straight months till December 2025.

 

Due to low inflation, the latest data showed that in nominal terms (current prices), gross value added (GVA) for agriculture and allied activities is projected to grow at just 0.3 per cent in FY26, down from 9.2 per cent in the previous fiscal, according to the new series.

 

Regarding basmati, trade and market sources said farm-gate prices have dropped by almost 7-10 per cent in the last few days as consignments totalling around 200,000-400,000 tonnes (worth about Rs 3,200 crore) bound for West Asia are stranded in various places (200,000 tonnes at ports and 200,000 tonnes at sea).

 

When it comes to bananas, trade sources said around 1,200 containers from Solapur alone are stuck in cold storage, which has stalled harvesting, with farmers facing demurrage charges of Rs 8,500 per container daily.

 

Yesterday, the Indian Rice Exporters Federation (IREF), in a representation to the Agricultural and Processed Food Products Export Development Authority (APEDA), said that international freight rates have risen by an estimated 15-20 per cent, while war-risk surcharges and insurance premiums for Gulf-bound shipments have increased significantly.

 

Bunker fuel costs have also climbed, with marine fuel oil prices rising to around $580 per tonne from about $520, it said.

 

Sources said Indian basmati prices in international markets have softened by around $50 per tonne as shipping costs have gone up by almost $200 per tonne due to the conflict.

 

“NAFED and FCI must immediately purchase all stranded perishable produce (onions, bananas, grapes) at pre-crisis support prices (minimum Rs 35/kg for onions, Rs 25/kg for bananas) to prevent distress sales and rotting and also provide an immediate subsidy of Rs 2,500 per quintal for onions and other stranded commodities, as demanded by farmers," the Left-affiliated All India Kisan Sabha (AIKS) said in a statement.

 

WEST ASIA FOOD DEPENDENCY

 

According to a report by Alpen Capital, over the years Gulf Cooperation Council (GCC) countries — which include major nations currently at war with Iran — are increasingly focusing on producing their food domestically and lowering reliance on imports.

 

As of 2023, the report said that in terms of self-sufficiency, domestic food production in the GCC was able to meet 38.8 per cent of local demand, higher than the 28.4 per cent recorded in 2018.

 

The various initiatives taken by regional governments to boost production across the value chain have led to substantial improvements over the years.

 

Between 2018 and 2023, the region’s domestic food production grew at a CAGR of 4.6 per cent, exports increased at a CAGR of 2.9 per cent, while net imports declined at a CAGR of 4.8 per cent.

 

"This further affirms the GCC nations’ success in achieving their food security goals," the report states.

 

GCC nations import the majority of their food items from countries like India, Brazil and the US.

 

Another report by Ardent Advisory and Accounting said that GCC countries, led by Saudi Arabia and the UAE, have prioritised agricultural development through strategic investments in modern farming technologies like greenhouses and vertical farming.

 

“Rising health awareness has boosted demand for fresh, high-quality vegetables, thereby driving local production,” the report said.

 

Fertilisers

 

Putting speculation about an impending shortage of fertilisers due to disruption in gas supplies from the Middle East to rest, the Department of Fertilisers today said that as of March 6 the country has fertiliser stocks equivalent to 17.73 million tonnes, which is a massive 36.5 per cent more than the 12.98 million tonnes held during the same period last year.

 

The government, in an official statement, said that product-wise, DAP stocks are now estimated at 2.51 million tonnes, followed by 5.58 million tonnes of NPKS and almost 6 million tonnes of urea.

 

“This robust, data-backed inventory conclusively demonstrates that the nation is exceptionally well stocked and fully insulated against any global supply chain shock as we approach the peak kharif sowing season,” the government statement said.

 

It said that to ensure continuity of supplies, the government has already imported 9.8 million tonnes of finished fertilisers in February 2026, while another 1.7 million tonnes are lined up for the next three months.

 

The government said Indian entities have secured long-term supply agreements with major international producers for P&K fertilisers.

 

On the critical question of ensuring adequate LNG supplies — largely imported from the Middle East — for the fertiliser sector, the government said it is actively manoeuvring to optimise resources and has assured fertiliser companies that gas supply to their sector remains a top national priority.

 

“Farmers are encouraged to proceed with their kharif preparations without any panic,” the statement said.

 

India imports significant quantities of raw materials required to make fertilisers and finished products from the GCC countries.

 

As per trade sources, India imported roughly 70 per cent of its urea, 42 per cent of DAP, 83 per cent of ammonia and 60 per cent LNG from the GCC countries in FY25. In total, the country imported around 5.65 million tonnes of urea, 4.57 million tonnes of DAP and 2.54 million tonnes of ammonia last year.