State-run Gujarat State Fertilizers & Chemicals Ltd (GSFC) said fertilizer raw material prices have surged due to the US-Iran conflict in the West Asian region, but government subsidy support is expected to fully absorb the cost impact and protect margins in key products such as Urea and Diammonium Phosphate or DAP
“The fertilizer segment heads into the first quarter of FY27 with raw material markets still unsettled. Geopolitical pressures in the Middle East continue to drive input cost volatility,” SK Bajpai, Chief Financial Officer, GSFC said during the company’s Q4 FY26 earnings conference earlier this week. However, the company maintained that profitability in core fertilizer products remains insulated because of government support measures. “DAP and urea, two of the fertilizer products, there is no margin difference because it is fully protected by the Government of India,” Bajpai said. “Whatever additional cost in the gas or whatever production additional cost we are incurring in the DAP manufacturing, that is reimbursed by the Government of India by way of special package,” he added.
The management said prices of critical inputs such as ammonia, sulfur and sulfuric acid have increased sharply amid geopolitical disruptions and supply uncertainty. “It is a difficult situation for the company as well as for the country,” Bajpai said, referring to the spike in prices of “ammonia, sulfur, sulfuric acid and other raw material inputs”. GSFC said it remains relatively insulated from immediate supply disruptions because of captive ammonia and sulfuric acid production facilities at its Fertilizernagar complex. “Fortunately, we are having the ammonia plant and sulfuric acid plant in our Fertilizer Nagar complex,” Bajpai said.
