Rising DAP, potash costs dampen kharif yield prospects


India’s fertiliser consumption in FY20 was about 61 million tonne — of which 55% was urea — and is estimated to have elevated by 5 million tonne in FY21. Since non-urea (MoP, DAP, advanced) varieties price greater, many farmers favor to make use of extra urea than truly wanted.

As costs of diammonium phosphate (DAP) and sophisticated fertilisers have surged within the intentional market in latest months, home fertiliser corporations have hiked costs for the upcoming kharif season steeply, in a transfer that might scale back crop yield as farmers resort to extreme use of subsidised fertiliser urea as an alternative.

Costs of phosphatic and potassic fertilisers are decided by the market as subsidies supplied by the federal government are minimal and stuck. These fertilisers are principally imported.

Fertiliser cooperative IFFCO hiked costs of DAP and sophisticated fertilisers by 46-58% for provides from new international contracts for inputs, in comparison with the rabi season. It has, nonetheless, mentioned that about 11.26 lakh tonne of advanced fertilisers would nonetheless be offered at outdated charges since these have been manufactured previous to the hike in international costs of the important thing uncooked materials.

“We at IFFCO will guarantee that there’s sufficient materials available in the market with outdated charges and I’ve instructed the advertising workforce to promote solely beforehand packed materials with outdated charges to farmers. We all the time take determination by retaining a farmer-first strategy,” IFFCO’s managing director US Awasthi mentioned in an announcement on Thursday.

An inside letter from IFFCO’s advertising director Yogendra Kumar to managers informing them concerning the new charges had gone viral, producing a powerful response on social media.

“We at IFFCO, take robust objection [to] tweets or information linking any political occasion or authorities for enhance in value of advanced fertilisers (combination of N, P, Ok and S). They’re decontrolled, therefore, [there is] no linkage to any political occasion or authorities,” Awasthi mentioned.

The brand new costs of advanced fertilisers are tentative because the worldwide costs of the uncooked supplies are but to be finalised by corporations, he mentioned. “Certainly, there’s a sharp enhance seen within the tendencies of worldwide uncooked materials costs.”

The landed prices of imported DAP is now at about $540 per tonne (Rs 40,281), up from round $400 in October. Equally, the costs of intermediates reminiscent of ammonia and sulphur have additionally gone up from round $280 and $85 per tonne to $500 and $220 per tonne, respectively. Muriate of potash (MoP) charges have surged to $280 from $230 throughout the identical interval.

The federal government deregulated costs of potash and phosphatic fertilisers in 2010 by agreeing to pay a set quantity of subsidy to be determined in the beginning of yearly. Fertiliser corporations are allowed to repair the MSP of those non-urea crop vitamins primarily based on market charges. The nation is absolutely depending on import for potash, whereas 80-90% of phosphatic fertiliser is imported to make DAP.

India’s fertiliser consumption in FY20 was about 61 million tonne — of which 55% was urea — and is estimated to have elevated by 5 million tonne in FY21. Since non-urea (MoP, DAP, advanced) varieties price greater, many farmers favor to make use of extra urea than truly wanted.

The Centre has not modified the utmost retail value (MRP) of urea since 2012, when it was elevated by Rs 50/tonne to Rs 5,360/tonne. The MRP of a forty five kg bag of urea is Rs 242 and that of a 50 kg bag is Rs 268, all costs unique of fees in the direction of neem coating and taxes as relevant. In comparison with this, a 50 kg bag of DAP prices Rs 1,900.

The federal government’s whole outgo on fertiliser subsidy has been pegged at Rs 79,530 crore for FY22, of which Rs 58,767 crore has been budgeted just for urea.

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