Fertiliser scarcity looms as international costs skyrocket

A scarcity of fertilisers is looming on the again of skyrocketing worldwide costs whose results, it’s feared, could also be felt in the course of the coming rabi season forward of the February-March Assembly elections in Uttar Pradesh, Punjab and Uttarakhand. The provide crunch is because of the general bullish international agri-commodity markets, a “non permanent suspension’ of exports by China and western financial sanctions towards Belarus.
Industry information accessed by The Indian Express reveals imports of all main fertilisers by India falling throughout April-July 2021 over April-July 2020. That consists of urea (down from 23.43 lakh tonnes to 22.05 lakh tonnes), di-ammonium phosphate (24.06 lt to 22.03 lt), muriate of potash (16.06 lt to 10.33 lt) and complicated fertilisers (6.43 lt to five.45 lt).
But it isn’t solely imports. Even home manufacturing has been decrease for urea (78.82 lt in April-July 2021 towards 82.18 lt in April-July 2020) and di-ammonium phosphate (11.11 lt towards 12.66 lt). It has, nevertheless, gone up for fertilisers having decrease nitrogen (N), phosphorus (P), potassium (Okay) and sulphur (S) content material. Thus, output of NP/NPK complexes has elevated (from 27.89 lt to 30.91 lt) together with that of single tremendous phosphate (from 17.01 lt to 17.06 lt).
“There is no shortage for now or in the remaining part of the current kharif cropping season (June-September). The problem may arise in the rabi season after October,” stated trade sources. The purpose for that’s hovering worldwide costs, each of fertiliser merchandise in addition to their imported inputs.
Last 12 months right now, India had contracted urea imports at round $290 per tonne CFR (price plus freight). Those costs at the moment are at $510-515 per tonne. Import costs have equally surged over the past one 12 months for di-ammonium phosphate (from $330 to $630 per tonne) and intermediates resembling phosphoric acid (from $625 to $998), ammonia ($205 to $670) and sulphur ($75 to $210). Morocco’s state-owned OCP has, furthermore, raised its phosphoric acid value for the July-September 2021 quarter to $1,160 per tonne CFR, which Indian DAP producers are saying is unviable for them.
The state of affairs is equally tight in muriate of potash (MOP), the place imports into India had been coming at $230 per tonne a 12 months in the past. Indian corporations, in April, signed contracts with main international MOP producers for supplying via December 2021 at $280 per tonne CFR. But with the US and European Union imposing sanctions towards the Alexander Lukashenko regime in Belarus for alleged human rights abuses – the Eastern European nation was India’s second largest MOP provider in 2020-21 after Canada – there may be discuss of the $280 charge being renegotiated and recent imports getting contracted at $400 ranges.
Belarus aside, China is the opposite massive supply of uncertainty. In the final two years, it has been India’s greatest provider of urea and No. 2 for di-ammonium phosphate after Saudi Arabia. Last week, China’s National Development and Reform Commission introduced that it had summoned fertiliser corporations for a dialogue towards hypothesis and hoarding of vitamins, following which they determined to briefly droop exports and guarantee provides within the home market.
“The Narendra Modi government will have to take a call soon on hiking subsidy rates on N, K and S. Not doing that would force companies to either sharply hike retail prices or slash production and imports, resulting in reduced fertiliser availability during the rabi season. The stocks position will turn precarious by early- to mid-September,” the sources warned.

The Modi authorities had, on May 20, raised the per-kg subsidy charge on ‘P’ from Rs 14.888 to Rs 45.323, which is relevant until October 31. It ensured no or little or no will increase within the retail costs of di-ammonium phosphate, single tremendous phosphate and different phosphorus-containing fertilisers for the kharif season. Whether comparable upward revisions within the subsidy charges for different vitamins stays to be seen.
Interestingly, the Centre’s fertiliser subsidy invoice had, in the course of the earlier UPA authorities’s time, massively shot up from Rs 32,490 crore in 2007-08 to Rs 76,603 crore in 2008-09. The improve — even greater, after including the 20,000 crore of bonds issued to fertiliser corporations in lieu of money subsidy — occurred when international urea, DAP and MOP costs had scaled file highs of $865, $1,230 and $1,060 per tonne, respectively throughout August-October 2008. That was once more simply months earlier than the 2009 Lok Sabha elections, when the UPA returned to energy.