Why Fertiliser Stocks Are Rising Today: Russia Supply, Import Dependence and What It Means for Investors

Fertiliser stocks saw strong intraday gains during the first half of the trading session on August 25, 2026. FACT rose as much as 15% during the session, while Rashtriya Chemicals and Fertilisers gained around 5 % and Madras Fertilizers gained around 7% .

The trigger was Russia's assurance that it would continue supplying fertilisers to India and was prepared to increase supplies further. But the size of today's rally makes much more sense when we look at percentages rather than tonnes.

Between April 2025 and February 2026, Russia accounted for roughly 25% of India’s combined reported imports of urea, DAP, MOP and NPK fertilisers, based on Department of Fertilizers data. 

For some fertilisers, Russia's share is much larger.

How Much of India’s Fertiliser Requirement Is Met Domestically?

Not every fertiliser has the same degree of reliance on overseas supply. Government data for FY24 shows that domestic production met roughly 87 - 88% of urea consumption, around 87 - 90% of NPK/complex fertiliser consumption depending on the classification used, and only about 39 - 40% of DAP consumption.

MOP is different. India currently has very limited meaningful commercial domestic potash production and therefore meets almost all of its MOP requirement through imports.

Import dependence should not be calculated simply by subtracting domestic production from consumption because inventories can move between financial years. The domestic-production share nevertheless gives a useful indication of where India’s structural supply exposure is highest. 

So the import dependence looks roughly like this:

This is the first reason Russia's statement matters.

For a product such as MOP, India cannot quickly increase domestic production if overseas supply is disrupted. Although potash resources have been identified domestically, meaningful commercial production has yet to develop at the scale required to meet Indian demand. For DAP too, domestic production met only about 40% of FY24 consumption, making international supply critical to balancing the market. 

Import Dependence Has Actually Increased Recently

Recent data makes the situation even more relevant. During April to January FY26, India's urea imports increased by roughly 83% year on year. DAP imports increased by around 40% during the same period.

Another way of looking at this is through sales.

During April to January FY26, urea imports were equivalent to roughly 25% of domestic urea sales during the period.

For DAP, imports were equivalent to around 66% of sales.

This does not mean exactly 25% and 66% of every bag sold came from imports because companies also carry inventories. But it shows the scale of India's exposure to international supply. For DAP particularly, global supply is not a side issue. It is central to the market.

Now Look at Russia's Share

Between April 2025 and February 2026, Russia supplied roughly 25% of India's combined imports of urea, DAP, MOP and NPK fertilisers.

But Russia's importance varies dramatically by product.

Russia supplied roughly:

• 14% of India's urea imports
• 12% of India's DAP imports
• 47% of India's MOP imports
• 59% of India's NPK imports

*Data note: Department of Fertilizers import data for MOP include both agricultural and industrial use.

These percentages are calculated from official Department of Fertilisers country wise import data.

That changes how investors should read today's news.

Russia is not particularly dominant in India's urea or DAP imports. But it supplied almost half of India's imported MOP and nearly 60% of imported NPK fertilisers during the period.

So Russia assuring continued supplies is especially relevant for India's potash and complex fertiliser supply chain.

Why Does Better Supply Visibility Matter Financially?

Here we need to separate the operating impact from the stock market reaction. Fertiliser companies do not necessarily earn more money simply because Russia sends more fertiliser to India. This is a regulated sector. Farmer prices and government subsidies play a major role in determining economics.

The immediate financial benefit is therefore lower supply uncertainty, not automatically higher margins. If imported fertiliser or raw materials become difficult to source, companies can face lower product availability, higher procurement costs and larger working capital requirements.

Assured supplies reduce one part of that risk.

This is particularly relevant when nearly 60% of DAP demand and 100% of MOP demand structurally depend on imports.

However, the Russia announcement should not be interpreted as relief from an existing nationwide fertiliser shortage. Department of Fertilizers data released in August indicated that Kharif 2026 availability of urea, DAP, MOP and NPKS remained adequate. The significance of Russia’s statement is therefore more about reducing perceived future replenishment and geopolitical supply-chain risk than solving an immediate all-India shortage. 

The Government Subsidy Is the Second Part of the Equation

The second major factor supporting the sector is government subsidy. The FY27 Budget provided approximately ₹1.71 lakh crore to the Department of Fertilisers.

More importantly, the subsidy requirement for phosphatic and potassic fertilisers has increased. For Kharif 2026, the government approved around ₹41,534 crore under the Nutrient Based Subsidy scheme.

That is roughly 12% higher than the subsidy requirement for Kharif 2025.

Because companies selling products such as DAP cannot simply pass every increase in international prices to farmers. Government subsidy absorbs part of that difference. But there is an important distinction for investors. - Higher subsidy does not equal higher profit.

What matters more is whether subsidy compensation is adequate and whether companies receive their subsidy receivables on time. If receivables rise sharply, cash gets locked up, working capital increases and companies may need additional borrowing.

That is why an analyst should track cash flow alongside reported profit.

Why Did Fertiliser Stocks Rally So Much Today?

The market is essentially reacting to three numbers. First, India remains around 60% import dependent for DAP and 100% import dependent for MOP.

Second, Russia supplied around 25% of India's combined urea, DAP, MOP and NPK imports in the eleven months to February 2026.

Third, Russia's importance is concentrated in some critical categories, accounting for around 47% of MOP imports and 59% of NPK imports.

Put together, Russia's supply assurance lowers a real supply chain risk. That explains why FACT, RCF, Madras Fertilizers and Paradeep Phosphates saw such strong buying interest today.

What Does This Mean for Investors?

In the short term, the news is clearly positive for sentiment because a major supplier has reduced concerns around availability.

But today's stock gains of around 6% to 15% are much larger than any immediately measurable change in company earnings. That makes today's move primarily a sector re-rating based on lower perceived risk.

For the long term, four numbers matter more.

Investors should monitor how much of each company's raw material requirement comes from imports, how subsidy receivables are moving, whether working capital is increasing and whether higher availability translates into higher production and sales volumes.

Companies with better raw material security, lower debt and stronger cash conversion should be financially better placed than companies simply benefiting from sector sentiment.

Bottom Line

Today's fertiliser rally is not simply about Russia promising more supply. It is about the scale of India's import exposure.

India remains around 60% dependent on imports for DAP and 100% for MOP, while Russia itself supplied around 25% of India's combined imports of the four major fertiliser categories during April 2025 to February 2026.

Russia's contribution becomes even more significant in MOP and NPK, where its import share was approximately 47% and 59% respectively. That is large enough for investors to pay attention.

For now, the announcement reduces supply risk and supports sentiment. Whether it turns into a sustainable earnings story will depend on margins, subsidy receivables, working capital and actual volume growth in the quarters ahead.