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Fertiliser sales rise despite patchy monsoon | Business News


Erratic monsoon may have hit tractor sales, which are down 3.8 per cent in April-October 2023 over April-October 2022 (from 6.11 lakh to 5.88 lakh units), as per industry data. However, sales of fertilisers are up, with the corresponding year-on-year growth at 7.5 per cent for urea, 17.9 per cent for di-ammonium phosphate (DAP), 6 per cent for muriate of potash (MOP), 5.4 per cent for single super phosphate and 22.7 per cent for complexes containing varying proportions of nitrogen (N), phosphorous (P), potassium (K) and sulphur (S).

“Sales were good during this kharif season (May-July sowing and September-October harvesting), but we aren’t sure how much of it translated into actual field consumption. A clear picture will emerge only by March towards the end of the rabi season (October-December sowing and March-April harvesting),” N. Suresh Krishnan, chairman of the Fertiliser Association of India (FAI), told The Indian Express.

The southwest monsoon was patchy this year. While rainfall was 5.6 per cent below the historical average (technically “normal”) for the season (June-September) as a whole, it was poorly distributed both temporally (deficient in June and August) and spatially (subpar in eastern Uttar Pradesh, Bihar, Jharkhand, West Bengal, Assam, Karnataka, western Maharashtra and Marathwada). The northeast monsoon season (October-December), too, has registered 11.5% below-average rain so far.

Krishnan pointed out that international prices of fertilisers and raw materials have fluctuated significantly in the last one year and more.

Fertiliser sales rise despite patchy monsoon

Landed prices of imported DAP, which peaked at $950-960 per tonne in July 2022, eased to $440 a year later, before climbing again to the current $595 levels. Prices of imported ammonia and phosphoric acid (intermediates for DAP) similarly touched $1,575 per tonne in April 2022 and $1,715 in July-September 2022 respectively. These crashed to $285 and $875 by July-August 2023, only to recover to $600 and $985 respectively now.

Festive offer

“The government has done well to insulate our farmers from global price volatility. The maximum retail price (MRP) of urea has remained at Rs 262 per bag, while also being maintained at Rs 1,350/bag for DAP, Rs 1,300-1,350/bag for 20:20:0:13 (a popular complex), Rs 1,470/bag for 10:26:26 and 12:32:16, and Rs 1,650/bag for MOP,” said Krishnan. A bag of urea contains 45 kg, while 50 kg for other fertilisers.

The Centre has ensured no MRP increases for farmers by providing for more subsidy to fertiliser companies for their higher production/import costs. The fertiliser subsidy, which amounted to Rs 81,124.33 crore in 2019-20, shot up to Rs 127,921.74 crore in 2020-21, Rs 153,758.10 crore in 2021-22 and Rs 251,339.35 crore in 2022-23, while budgeted at Rs 175,099.92 crore for the current fiscal.

The industry wants the higher subsidy, now mainly given on urea and DAP, to be extended to MOP and complexes containing K. “Among non-urea fertilisers, the highest MRP normally was that of DAP, followed by 10:26:26, 12:32:16, 20:20:0:13 and finally MOP. That price hierarchy has been disturbed, with MOP and other K-containing fertilisers currently retailing higher than DAP. It needs correction,” added Krishnan.

Agriculture scientists consider the ideal N:P:K use ratio for Indian soils at 4:2:1. As against this, the actual ratio during the kharif 2023 season was assessed at 10.9:4.9:1. The industry has attributed the nutrient imbalance to the higher MRPs of K-containing fertilisers, leading to their lower sales.





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