Sulphur Prices Surge

The surge in sulphur prices has affected fertiliser security and, once again, exposed India’s Import Vulnerability. Read here to learn more.

International sulphur prices have surged sharply, rising from around US$280 per tonne in July 2025 to around US$1,050 per tonne in July 2026. The spike reflects the interaction of geopolitical disruptions, export restrictions, logistical bottlenecks and a pre-existing structural deficit in the global sulphur market.

For India, the development is significant because sulphur is an essential input for phosphatic fertilisers, sulphuric acid and several industrial processes, while the country remains substantially dependent on imports.

Read: Environmentally Friendly Fertilisers

What is Sulphur and Why is it Important?

Sulphur is a critical industrial mineral whose largest downstream use is the production of sulphuric acid (H₂SO₄).

It is important for:

• Fertiliser production: Sulphuric acid is used to manufacture phosphoric acid and phosphate fertilisers such as DAP and other phosphatic fertilisers.
• Agriculture: Sulphur itself is an essential plant nutrient and is increasingly important in correcting sulphur-deficient soils.
• Metallurgy: Sulphuric acid is used in mineral processing and metal extraction.
• Chemical industry: Used in dyes, pharmaceuticals, detergents and chemical intermediates.
• Rubber industry: Used in vulcanisation.
• Energy-transition minerals: Sulphuric acid is increasingly required for processing nickel laterite ores.

Thus, sulphur links food security, industrial production and the clean-energy transition.

The Unusual Nature of the Sulphur Market

Unlike many minerals, sulphur supply is closely tied to the production of other commodities.

• Around 92% of global sulphur production is recovered as a by-product of petroleum refining and natural-gas processing, while only about 8% comes from direct mining of natural sulphur or sulphur-bearing minerals.
• This creates an unusual supply structure: sulphur supply cannot rapidly increase merely because its price rises.
• Additional production depends largely on refinery throughput, sour-gas processing and the availability of suitable feedstock.
• Consequently, disruptions to oil and gas infrastructure can simultaneously affect energy markets and sulphur availability.

Major Global Producers

• China is the world’s largest sulphur producer, followed by the United States, Russia, Saudi Arabia and the UAE.
• Estimates for 2025 put China’s production at around 19 MT, while Russia produced around 7.5 MT.
• This concentration makes sulphur vulnerable to geopolitical disruptions, particularly because several major producers are located in strategically sensitive regions.

Why are Sulphur Prices Rising?

1. Russia-Ukraine War

Russia is an important sulphur producer and exporter.

• Repeated attacks affecting Russian oil and gas-processing infrastructure have disrupted sulphur recovery.
• More importantly, Russia has adopted export restrictions to protect domestic availability.
• The Russian government extended restrictions on exports of industrial sulphur until 31 December 2026, citing the need to stabilise domestic raw-material supplies and maintain mineral-fertiliser production.

2. West Asian Geopolitical Disruptions

• West Asia is exceptionally important for the global sulphur trade because major producers such as Saudi Arabia, UAE, Qatar, Kuwait and Oman supply large volumes to international markets.
• Disruptions to shipping routes and higher freight and insurance costs have therefore amplified the supply shock.
• The Indian government itself acknowledged that geopolitical tensions in West Asia during 2025-26 affected imports of ammonia, phosphoric acid and sulphur, while increasing freight, insurance costs and shipment delays.

3. Structural Global Deficit

The geopolitical shocks have occurred against an already-tight market.

CRU estimates cited in recent market reporting put:

Indicator	2025
Global sulphur demand	~72.8 MT
Global sulphur supply	~70.8 MT
Approximate deficit	~1.9 MT

Therefore, the current price surge cannot be attributed solely to war. Geopolitical disruptions have intensified an underlying structural imbalance.

4. EV Battery Supply Chains as a New Demand Driver

• Sulphur’s importance is expanding beyond conventional fertiliser demand.
• Large quantities of sulphuric acid are required in High-Pressure Acid Leach (HPAL) facilities to extract nickel from laterite ores.
• Nickel is an important input in several lithium-ion battery chemistries, particularly nickel-rich cathodes.
• Indonesia’s rapid expansion of nickel processing has therefore generated substantial additional demand for sulphuric acid.
• Hence, the energy transition itself can increase demand for a commodity whose supply is structurally difficult to expand quickly.

India’s Sulphur Vulnerability

• India is among the world’s significant sulphur producers, with production estimated at around 7 MT, but domestic output is insufficient to meet total requirements.
• India imported approximately 25 MT of sulphur in 2025. Around 84% originated from the Middle East, particularly Oman and the UAE.
• A large proportion of sulphur demand originates from the fertiliser industry.
• The Fertiliser Association of India estimates that about 52% of the sulphur requirement of the fertiliser sector was met through imports in 2024-25.

India’s import structure

Indicator	Approximate figure
Sulphur imports, 2025	2.25 MT
Middle East share	~84%
Major suppliers	Oman, UAE, Qatar, Saudi Arabia, Kuwait
Russia’s share	~6.5%
Fertiliser-sector sulphur requirement met through imports	~52%

This concentration creates geographical and geopolitical import vulnerability.

Why Does it Matter for India?

1. Fertiliser Security

• Sulphur is essential for producing phosphatic fertilisers.
• Higher sulphur prices can increase the cost of producing fertilisers and place additional pressure on India’s fertiliser-support system.
• India’s government has already identified sulphur, phosphoric acid and ammonia among the critical inputs affected by geopolitical disruptions.

2. Fiscal Pressure

• India regulates and supports fertiliser prices through mechanisms including the Nutrient Based Subsidy (NBS) framework for P&K fertilisers.
• Persistent increases in input costs can create pressure for higher international input prices, higher landed fertiliser costs, greater subsidy requirements, industry stress, and fiscal pressure

3. Food Security

Higher fertiliser costs can ultimately affect:

• fertiliser availability
• farmers’ input costs
• cropping decisions
• agricultural productivity
• food-price stability

Therefore, sulphur is not merely an industrial commodity; it has an indirect connection with food security.

4. Industrial Supply Chains

Sulphur shortages can affect:

• sulphuric-acid production
• metal extraction
• chemicals
• rubber
• petroleum refining
• pharmaceuticals
• battery-mineral processing

Thus, prolonged shortages could transmit the shock beyond agriculture.

A Paradox for India

India faces a peculiar situation.

• It is simultaneously a sulphur producer, a major sulphur importer and an exporter that has recently restricted exports.
• India suspended sulphur exports in 2026 amid tightening domestic availability and concerns over fertiliser supply. Market reporting indicated that refiners were increasingly prioritising domestic contractual customers.
• This illustrates the changing nature of critical-mineral policy: domestic availability can become more important than maximising commodity exports during periods of global scarcity.

Challenges for India

1. Import concentration: Heavy dependence on West Asian suppliers exposes India to geopolitical and maritime disruptions.
2. Limited short-term supply elasticity: Because most sulphur is recovered as a by-product, domestic production cannot simply be increased rapidly in response to higher prices.
3. Shipping vulnerability: Disruptions around critical maritime chokepoints can increase freight, insurance and delivery times.
4. Fertiliser subsidy pressure: Higher input costs can increase fiscal stress.
5. Competing industrial demand: Fertiliser production increasingly competes with metal-processing and energy-transition industries for sulphuric-acid availability.
6. Strategic-stock limitations: Unlike crude oil, India does not have an equivalent large-scale strategic sulphur reserve mechanism.

Way Forward

1. Diversify import sources

India should expand sourcing from:

• North America
• Central Asia
• Africa
• Other non-West Asian producers

The objective should be to reduce single-region dependence rather than simply replace one supplier with another.

2. Strengthen domestic recovery

Since much sulphur is obtained during petroleum refining and gas processing, India should improve:

• sulphur-recovery efficiency
• refinery desulphurisation systems
• recovery from sour-gas streams
• utilisation of sulphur-bearing industrial residues

This can increase domestic availability without depending exclusively on new mines.

3. Build strategic inventories

• A carefully designed strategic sulphur inventory could act as a buffer against temporary geopolitical or shipping disruptions.
• Stockpiles should particularly support critical fertiliser and industrial facilities during periods of extreme market stress.

4. Promote sulphur-use efficiency in agriculture

Long-term demand management should include:

• soil testing
• balanced fertilisation
• precision agriculture
• efficient nutrient application
• appropriate use of sulphur-containing fertilisers

This can reduce wastage while maintaining crop productivity.

5. Strengthen fertiliser raw-material security

India should treat sulphur alongside other critical fertiliser inputs such as:

• natural gas
• ammonia
• phosphoric acid
• potash

Long-term supply contracts and diversified procurement can reduce exposure to spot-market volatility.

6. Encourage recycling and alternative processes

Research should focus on:

• sulphur recovery from industrial waste streams
• recycling of sulphuric-acid-containing wastes
• alternative hydrometallurgical processes
• low-sulphur-demand mineral-processing technologies

7. Integrate critical-mineral and energy-transition policy

• The sulphur crisis demonstrates that the green transition depends on seemingly conventional commodities.
• India’s critical-mineral strategy should therefore consider second-order dependencies: EV batteries, nickel processing, sulphuric acid, sulphur.
• Such supply-chain mapping can identify vulnerabilities before they become bottlenecks.

Government Response

The Government of India has stated that it is pursuing diversified sourcing, long-term supply arrangements and continuous monitoring to safeguard fertiliser availability amid West Asian geopolitical disruptions.

Contingency measures have also been initiated for critical industrial chemicals.

These measures need to evolve from short-term crisis management towards a broader critical-input security strategy.

Conclusion

The sulphur crisis demonstrates how geopolitics, agriculture, industrialisation and the energy transition are increasingly interconnected.

Sulphur was traditionally viewed largely as a by-product of petroleum and natural-gas processing. Its growing importance in fertilisers, mineral extraction and battery-material supply chains is changing that perception.

For India, the immediate challenge is to manage higher import costs and protect fertiliser availability. The longer-term objective should be to build diversified sourcing, domestic recovery capacity, strategic inventories and more efficient sulphur use.

The broader lesson is that strategic autonomy does not necessarily mean complete self-sufficiency. It means reducing excessive concentration risks and ensuring that critical supply chains remain resilient even during geopolitical shocks.