Whalesbook
India's consideration of sulphur export restrictions comes at a critical time for global commodity markets. Driven by domestic worries about rising prices and supply stability, this move could worsen existing shortages. It follows China's planned ban on sulphuric acid exports and ongoing shipping disruptions from the Middle East. The combined pressures risk affecting industries from agriculture and food security to new energy and technology.
Compounding Supply Crisis
India's potential sulphur export limits could worsen a global shortage already under strain from several fronts. China, the world's top sulphuric acid producer, plans to stop exports by May 2026, removing about 4.6 million tons and creating an estimated deficit of 2.8 million tons. Turkey also recently banned sulphur exports from April 7, 2026, through Q3 2026 to protect its domestic market, further tightening global supply. These moves occur amidst severe geopolitical instability in the Middle East after conflict escalated in late February 2026. The Strait of Hormuz, a key shipping route, has faced major disruptions, impacting an estimated 20-45% of global sulphur and oil shipments. As a result, global sulphur prices have jumped 40% in the last month, and sulphuric acid prices are up over 50% internationally. Global sulphur production in 2025 was around 84 million tons, with the Middle East being a significant supplier.
Domestic Needs and Global Impact
For India, the main concern is securing raw materials for its crucial agricultural sector. Sulphur is a key ingredient for fertilizers like ammonium sulphate, single superphosphate (SSP), and diammonium phosphate (DAP). India imports over half its annual sulphur needs, about 2 million metric tons, with nearly 50% traditionally coming from Middle Eastern nations like Qatar, UAE, and Oman. Although India exports about 800,000 tons of sulphur yearly, mainly to China, limiting these exports would help boost domestic fertilizer supplies. The government has already instructed local oil refineries to supply fertilizer companies first. Any disruption to this vital material could mean higher fertilizer prices for Indian farmers, potentially affecting crop yields and food security, especially before the kharif planting season. India's fertilizer industry, currently seeing strong demand supported by government subsidies and domestic production efforts, faces substantial cost pressures from rising input prices. In 2024, India imported roughly $118 million of sulphuric acid, underscoring its reliance on international markets.
Wider Market Concerns
Global supply chains are so interconnected that India's potential export limits, aimed at domestic relief, could spark a broader crisis. The tight sulphur market is a significant worry for the mining sector, which uses sulphuric acid heavily for extracting metals like copper and nickel. Major copper producers in Chile, the Democratic Republic of Congo, and Zambia, alongside nickel operations in Indonesia, are already facing tougher competition and pricier acid. Copper demand is surging due to AI infrastructure and electrification, driving prices to record highs in early 2026, with forecasts for further increases. Nickel is also vital for EV batteries, highlighted by initiatives like the U.S. government's 'Project Vault' to stockpile critical minerals. Companies like Southern Copper (SCCO) and Vale (VALE) operate in this challenging supply environment. India's own sulphur exports, valued at $94.8 million in 2024 mainly to China, would also be cut, affecting trade. The Middle East, a key sulphur source for India, accounts for about 25% of global production and faces its own difficulties. Conflict-related disruptions have already increased shipping and insurance costs, driving up the final price of raw materials. Global sulphur prices in late 2025 ranged from about $428.67/MT to $448.00/MT, while India's CIF price was around $643.00/MT in February 2026. These prices are expected to climb quickly with ongoing export bans and geopolitical risks.
Future Outlook
With export bans from major suppliers like China and Turkey, ongoing geopolitical conflict, and strong demand from agriculture and new energy sectors, sulphur and sulphuric acid prices are expected to remain high for some time. India's choice on its export policy will be key in shaping these prices and the stability of global supply chains for fertilizers and industrial metals. Analysts expect supply to remain tight and prices firm in the short to medium term, influenced by these supply disruptions and changing demand.