Why Fertiliser Stocks Are Rallying Today?

Fertiliser stocks were among the biggest gainers on Tuesday, 16 June 2026, after hopes emerged that the Strait of Hormuz could reopen as early as Friday, easing concerns over the supply of critical raw materials used by the sector.

The rally follows comments from US President Donald Trump, who said a preliminary agreement has been reached between the US and Iran to end the conflict in the Gulf. If implemented, the deal could lead to the reopening of the Strait of Hormuz, a key global shipping route that has remained disrupted in recent months.

Why The Strait Of Hormuz Matters For Fertiliser Companies?

For India, the Strait of Hormuz is not just important for crude oil imports. The country also depends heavily on the region for fertiliser raw materials such as anhydrous ammonia and sulphur.

India imports nearly 78.8% of its ammonia requirements and 95.9% of its sulphur needs from Hormuz-linked economies. These are ingredients used in the production of urea, DAP and other fertilisers.

Any disruption in supplies can increase production costs and create availability concerns during crucial sowing seasons.

According to the fertilisers ministry, 16 India-bound fertiliser ships are currently stranded in the Strait of Hormuz. These include:

• 8 ships carrying 3.3 metric tonnes of urea

• 4 ships carrying 2.57 tonnes of DAP

• 1 vessel carrying ammonia

• 3 ships carrying 1.1 lakh tonnes of sulphur

The possibility of these shipments resuming has improved sentiment across fertiliser stocks.

Fertiliser Stocks Jump Up To 15%

After hopes of a US-Iran agreement and the possible reopening of the Strait of Hormuz, investors rushed into fertiliser stocks on Tuesday. 

Shares of FACT surged 15% to ₹1,047. Chambal Fertilisers gained around 5%, while Rashtriya Chemicals & Fertilizers (RCF) rose 4%. Gujarat State Fertilizers & Chemicals advanced 3%.

Other fertiliser stocks, including Coromandel International, National Fertilizers, Deepak Fertilisers and Aries Agro also traded higher during the session.

Monsoon And Subsidy Expectations Add To Optimism

Apart from easing supply concerns, two other factors are supporting the sector.

The southwest monsoon has advanced further across the country, improving expectations for kharif sowing. A healthy monsoon increases demand for fertilisers such as urea, DAP and NPK products.

At the same time, reports suggest that rising global fertiliser prices could force the government to increase fertiliser subsidies.

According to media news, officials from the Department of Fertilisers have met Finance Minister Nirmala Sitharaman three times seeking a higher subsidy allocation. The FY27 fertiliser subsidy budget currently stands at ₹1.7 trillion.

If approved, the subsidy bill could rise to ₹3.4 trillion, double the budget estimate and above the previous record of ₹2.5 trillion seen in FY23 after the Russia-Ukraine conflict.

See details on why investors are closely tracking GIC shares

Conclusion: Is Fertiliser Supply At Risk?

Government officials have sought to reassure the market.

Joint Secretary in the fertilisers ministry, Bandana Preyashi, said India has already imported 5 million tonnes of fertilisers and crop nutrients for the current season while also increasing domestic production.

The country has additionally floated a global tender to import 1.7 million tonnes of urea.

According to the ministry, India is expected to consume 38.39 million tonnes of fertilisers during the current crop season, and there are currently no major concerns regarding fertiliser availability.

For now, improving geopolitical developments, a strong monsoon outlook and expectations of higher government support have put fertiliser stocks back in focus.