Sulphur prices rise due to Russia-Ukraine, West Asia wars

1. At a Glance

• Sulphur is mostly a by-product: about 92% of world output comes from petroleum refining and natural gas processing. Only 8% is mined from natural deposits or sulphur-rich minerals such as pyrites [1]. When oil and gas output is disrupted, sulphur supply falls with it.
• The international sulphur price rose almost four-fold, from $280/tonne (July 2025) to $1,050/tonne (July 2026). This has added to India's import bill [1].
• India is among the top 10 producers (3.7 MMT), yet it still imports sulphur. About 90% of those imports come from West Asia [1]. This makes it an energy-security, food-security and geopolitics topic in one.
• Demand is also rising because sulphur is used in metals processing linked to battery production [1]. So the topic links fertilisers, critical minerals and the energy transition.

2. Why in the News

• Prices began climbing in late 2025, driven by rising demand and the Russia-Ukraine war. They crossed $500/tonne by December 2025 [1].
• Prices shot up from March 2026 after the U.S. and Israel attacked Iran [1].
• Disruption in the Strait of Hormuz pushed global fertiliser prices up and tightened supplies [6].
• In August 2026, the average sulphur price was about 262% higher than in August 2025 [2][3][4].
• China set a 700,000-tonne quota on sulphuric acid exports, cutting overseas supply by 45%, and then stopped exports from May 2026 [6][7].
• Article dated 30 September 2026 in The Hindu (Page 11, Chennai edition), by Devyanshi Bihani [1].

3. Background & Evolution

• Why supply depends on hydrocarbons: sulphur is removed from crude oil and sour gas during refining and processing. Because of this, supply follows oil and gas output, not sulphur demand [1].
• Price path:
• $280/t in July 2025 [1]
• more than $500/t by December 2025 [1]
• sharp rise after March 2026 [1]

• $1,050/t in July 2026 [1]

• India's position: imports have grown over the years, and West Asian producers dominate supply [1].

• Earlier shock: the Russia-Ukraine war (from 2022) had already tightened fertiliser and raw-material markets. West Asia is the second shock in this cycle [1][7].

4. Core Static Facts

Parameter	Fact
Share of global sulphur from refining and gas processing	~92% [1]
Share mined directly (natural deposits, pyrites)	~8% [1]
Largest producer, 2025	China – 19 MMT [1]
Next largest producers	U.S. 8.1 MMT; Russia 7.5 MMT; Saudi Arabia 7.2 MMT; UAE 6.3 MMT [1]
India's production	3.7 MMT (among the top 10) [1]
India's imports, 2025	2.25 MMT, of which 2.02 MMT from West Asia [1]
Russia's share of India's imports	0.15 MMT (~6.5%) [1]
Main consuming sector in India	Fertiliser industry (Fertiliser Association of India estimate) [1]
Fertiliser raw materials affected by the price rise	Sulphur, ammonia, sulphuric acid (used in P&K fertilisers) [3]
India's import dependence for phosphates	~90–95% of rock phosphate and about half of phosphoric acid [5]
Gulf share of India's DAP imports	~30%; India imported ~4.57 MT of DAP in FY25 [3][4]

5. Multi-Dimensional Analysis

Economic

• A four-fold price rise increases India's import bill and puts pressure on the current account [1].
• The Centre raised the per-kg subsidy rate for phosphorus by 21% (non-urea subsidy up 10–21%) because P&K raw-material prices rose [3].
• About 58% of the FY27 fertiliser subsidy budget was used in less than five months [2].
• The government was reported to be considering keeping retail fertiliser prices unchanged for farmers. That means the Centre absorbs the cost through the fiscal deficit [4].

Agricultural / Food Security

• Sulphur feeds sulphuric acid, which feeds phosphoric acid, which is used to make DAP and complex (NPK) fertilisers. So a sulphur shock raises the cost of phosphatic fertilisers [3][5].
• Domestic fertiliser sales fell 10.33% in August 2026. Weak rains were the reported cause, and farm-input stress comes on top of that [2].

Geopolitical / Strategic

• About 90% of India's sulphur comes from West Asia, so India is exposed to any disruption at Hormuz [1][6].
• Export curbs by China on sulphuric acid show how commodity supply can be restricted by a single country [6][7].
• The Russia-Ukraine war and the West Asia conflict hit supply at the same time [1].

Scientific / Technological

• Sulphur demand is rising from metals processing linked to battery production. This ties sulphur to critical minerals and the energy transition [1].
• Supply cannot easily expand on its own because it depends on hydrocarbon throughput. If the world decarbonises and refines less oil, by-product sulphur output could fall over time. This is an inference from the 92% figure [1].

Governance / Administrative

• The government has taken steps to protect fertiliser supplies during the West Asia tensions [5].
• The subsidy has to be revised during the year, which makes fertiliser budgeting harder [2][3].

6. Recent Developments (last 12–18 months)

• July 2025: sulphur at $280/t [1].
• Late 2025: prices start rising because of higher demand and the Russia-Ukraine war [1].
• December 2025: prices cross $500/t [1].
• March 2026: U.S.-Israel strikes on Iran lead to a steep price rise [1].
• April 2026: Centre raises the non-urea (NBS) subsidy by 10–21%, with a 21% rise for phosphorus [3].
• May 2026: China stops sulphuric acid exports after an earlier 700,000-tonne quota [6][7].
• July 2026: sulphur at $1,050/t [1].
• August 2026: sulphur about 262% higher year-on-year. Fertiliser sales fall 10.33% [2].
• By August 2026: 58% of the FY27 fertiliser subsidy budget has been used [2].

7. Prelims Hooks

• About 92% of global sulphur is a by-product of oil refining and gas processing. Only about 8% is mined [1].
• Pyrites is a sulphur-rich mineral source of sulphur [1].
• Largest sulphur producer (2025): China, 19 MMT [1].
• Top five producers in 2025, in order: China > U.S. > Russia > Saudi Arabia > UAE [1].
• India produced 3.7 MMT and is among the top 10, but it is still a net importer [1].
• India imported 2.25 MMT of sulphur in 2025. About 90% came from West Asia [1].
• Russia supplied only about 6.5% of India's sulphur imports [1].
• Sulphur price went from $280/t (July 2025) to $1,050/t (July 2026) [1].
• The fertiliser industry is the largest consumer of sulphur in India [1].
• India imports about 90–95% of its rock phosphate and about half of its phosphoric acid [5].
• The Gulf supplies about 30% of India's DAP imports [3].
• In April 2026, the per-kg subsidy for phosphorus (P) was raised by 21% [3].
• China stopped sulphuric acid exports from May 2026 [6].

8. Why the Subsidy Protects Farmers but Hurts the Budget

• The Nutrient Based Subsidy (NBS) was built to let retail prices move. In practice, they do not.
• Under NBS (the scheme that pays a subsidy for each kg of N, P, K and S in a fertiliser), the government pays a fixed amount per kg of nutrient [15].
• The idea: the subsidy stays fixed, and the price for the farmer can go up or down with world prices.
• In reality, the government has paid special DAP packages on top of the NBS rates to keep DAP cheap [14]. Now it is considering keeping retail prices frozen again [4].

• So NBS starts to work like a fixed-price scheme. All of the four-fold sulphur shock lands on the Centre, and none of it reaches the farmer's price [1][4].

• Mid-year top-ups make the budget number meaningless

• In April 2026 the phosphorus subsidy rate went up 21% [3].
• By August, 58% of the full-year subsidy budget was already spent [2].
• The budget figure was fixed before the price shock. Every new jump in world prices needs a fresh top-up, and that adds to the fiscal deficit (the gap between what the government spends and what it earns).

9. How Costlier DAP Can Push Farmers Towards Even More Urea

• Urea and P&K fertilisers sit under two different price systems
• Urea is kept out of NBS. Its subsidy covers about 75% of its production cost [9].
• The sulphur shock raises the cost of DAP and complex fertilisers, but not urea [3].

• When DAP gets costlier or harder to find and urea stays cheap, a farmer is pushed to use more urea and less phosphate.

• Indian soils are already out of balance

• The recommended N:P:K ratio is 4:2:1. India actually uses about 6.7:2.4:1.6 [8].
• Urea overuse is worst in Punjab, Haryana and Uttar Pradesh [8].

• The Standing Committee on Chemicals and Fertilisers (December 2025) warned that heavy urea use and too few micro-nutrients are causing multi-nutrient deficiencies in the soil [8].

• Why this matters now

• A shock that hits only P&K fertilisers makes this imbalance worse. Over time, soil gives lower yields for the same input.
• Fertiliser sales already fell 10.33% in August 2026 [2]. Watch whether P&K sales fall faster than urea sales.

10. Why New Supply Deals Do Not Fix the Sulphur Problem

• India's supply deals cover finished phosphates, not sulphur
• India has long-term agreements for about 3.1 million tonnes of DAP a year from Saudi Arabia, starting in 2025-26 [11].
• IFFCO's joint venture in Jordan (JIFCO, with Jordan Phosphate Mines Company) supplies phosphoric acid [13].
• An older PIB release says Morocco supplied about 1.2 million tonnes of phosphoric acid, roughly half of India's imports. Morocco's OCP offered land at Jorf Lasfer for Indian plants [12].

• None of these deals covers raw sulphur. About 90% of that still comes from West Asia [1].

• Buying from Saudi Arabia is not the same as diversifying

• Saudi Arabia is itself a top West Asian sulphur producer [1].
• A long-term contract fixes the quantity. It does not protect the ships if Hormuz is disrupted [6].

• PIB had to report fertiliser ships safely crossing Hormuz as a special success [16]. That shows how much depends on this one route.

• Where real diversification lies

• Morocco (Atlantic coast) and Jordan are outside the Persian Gulf. Supply from them does not depend on Hormuz.
• Owning a stake in a plant abroad, like JIFCO, gives more assured supply than buying on the spot market [13].

11. Should Farmers Pay More? The Case For, and Why the Timing Is Wrong

• The strongest case for passing on the price
• The Economic Survey 2026 suggested raising the urea price and paying farmers directly through DBT (Direct Benefit Transfer, where money goes straight to the bank account) to cut overuse [10].
• The CACP (Commission for Agricultural Costs and Prices) recommended bringing urea under NBS [9].

• Their logic: if prices never move, farmers get no signal to use less. The subsidy bill also keeps growing.

• What this argument gets right

• Freezing prices hides the shock and adds to the fiscal deficit [2][4].

• Cheap urea is a major cause of the soil imbalance [8][9].

• Why it does not work in 2026

• The shock hits P&K fertilisers, not urea [3]. If farmers paid the full P&K price now, they would buy less phosphate and even more urea, which is the opposite of what reformers want.

• Weak rains had already cut fertiliser sales by 10.33% in August [2]. A price rise would fall on farmers who are already under stress.

• A fair way to see it: the reform is right, but the order matters. First bring urea under NBS, so all fertilisers follow the same price rule. Only then let prices move. Raising P&K prices alone during a shock would widen the gap.

12. Anchors for Answers

• Data: India's actual N:P:K use is 6.7:2.4:1.6, against the recommended 4:2:1 [8]
• Data: 58% of the FY27 fertiliser subsidy budget was used in less than five months [2]
• Data: India has long-term deals for about 3.1 MT of DAP a year from Saudi Arabia, from 2025-26 [11]
• Report/Committee: Standing Committee on Chemicals and Fertilisers, December 2025. It linked imbalanced fertiliser use, mainly urea, to multi-nutrient deficiency in soil [8]
• Report/Committee: Economic Survey 2026: raise the urea price and pay farmers through DBT [10]. CACP: bring urea under NBS [9]
• Scheme: Nutrient Based Subsidy (NBS). It pays a fixed subsidy per nutrient, but special DAP packages on top of it show that prices are still managed in practice [14][15]
• Scheme: JIFCO (IFFCO and Jordan Phosphate Mines joint venture). An example of securing raw material by owning a stake in a plant abroad [13]

13. Mains Relevance

• GS-III:
• Indian economy: mobilisation of resources, inflation, and the balance of payments
• Agriculture: farm subsidies and inputs such as fertilisers

• Energy security

• GS-II: effect of the policies and politics of developed and developing countries on India's interests, specifically West Asia and Russia

• GS-I: distribution of key natural resources (world sulphur and hydrocarbon geography)
• Possible questions: 1. "India's fertiliser security is hostage to West Asian geopolitics." Examine this in light of the recent rise in sulphur and phosphatic raw-material prices. (15 marks) 2. Many key industrial inputs are by-products of the hydrocarbon economy. Discuss what this means for India's energy transition and critical-mineral strategy. (10 marks) 3. Critically evaluate the Nutrient Based Subsidy regime as a way to protect farmers from global commodity price shocks. (15 marks)

14. Related Topics to Study Next

• Nutrient Based Subsidy (NBS) scheme: the channel through which the Centre absorbed higher P&K costs [3].
• Strait of Hormuz and India's energy security: the same chokepoint carries crude oil, LNG, sulphur and DAP [6].
• India's phosphate and potash import dependence: the other half of the P&K raw-material problem [5].
• Critical minerals and battery supply chains: the new source of sulphur demand [1].
• China's export controls on inputs: these have affected fertilisers, rare earths and graphite [6].
• Current Account Deficit and commodity shocks: how imported inflation affects macroeconomic stability [1].
• Soil health and secondary nutrients: sulphur deficiency in Indian soils and balanced fertilisation.

15. Common Errors / Trap Areas

• Largest producer: China, not Saudi Arabia or Russia. Russia is third and Saudi Arabia fourth [1].
• India's position: India is a top-10 producer and still an importer. Do not assume "importer" means "negligible producer" [1].
• Main source of imports: West Asia (~90%), not Russia (~6.5%). The Russia-Ukraine war affects the price, not India's direct supply much [1].
• Share mined: only about 8% is mined directly. Most sulphur is recovered from hydrocarbons, not mined [1].
• Which fertilisers are affected: the sulphur shock mainly hits phosphatic and complex (P&K) fertilisers under NBS, not urea, which is nitrogen made from natural gas [3].