Fertiliser statistics show that on the production front, 1997-98 witnessed a 17 per cent growth to 130.5 lakh tonnes as against 111.5 lakh tonnes in the previous year.

Indications are that the total production would increase to roughly 140 lakh tonnes in 1998-99. This is well above the targeted production of 137 lakh tonnes. Consumption of fertilisers is, however, expected to stay at the 1997-98 levels of 165 lakh tonnes. This is largely on account of an estimated fall in imports to 20 lakh tonnes from 32 lakh tonnes in 1997-98.

Industry sources say that the government's failure to fix concessional rates for decontrolled fertilisers on time has affected both the availability and consumption during both the seasons of the year. The availability of DAP and muriate of potash (MOP) between April-July dropped by 9.3 per cent and 52 per centrespectively, said sources. This is largely on account of lower production and imports. Availability of nitrogenous fertilisers, on the contrary, increased by nine per cent during the period.

The total production of nitrogenous fertilisers and phosphatic fertilisers during April-August 1998 is said to have increased by 6.5 per cent and 0.7 per cent respectively. The production of nitrogenous fertilisers increased to 100 lakh tonnes (85.9 lakh tonnes in 1996-97) during 1997-98. Compared to this the production of phosphatic fertilisers increased marginally to 29.8 lakh tonnes during 1997-98 as against 25.6 lakh tonnes in the previous year. Consumption of the nitrogenous fertiliser during 1997-98 was 111 lakh tonnes while that of phosphatic fertilisers and potassic fertilisers together was 54 lakh tonnes during 1997-98. The NPK balance which stands at 7.5:4:1 had improved considerably over 9.5:4:1 in 1996-97. Industry experts, however, fear that the NPK balance which could have been restored further thisyear considering the good monsoon season, may actually get distorted due to the an imbalance use of fertilisers.

On a futuristic view, "what emerges from the overall picture is that the year 1998-99 would be the same as the previous one as far as production and consumption is concerned," said SV Balkundi, director, Rama Phosphates.The fertiliser industry as a whole is estimated to have recorded a growth of just about 4-5 per cent from a double-digit 10 per cent growth in the previous year, he said.

Despite a good monsoon, the consumption of fertilisers was affected, partly due to the uncertain government policies which the industry feels was not conducive to growth. The Dharamsi Morarji Chemical Company managing director JL Thakkar said that the situation could have been averted and the country would have derived a better benefit from the good pre-rabi monsoon had the government not turned its back on lifting the price ceiling.

The government made two major announcements: the increase in the price ofurea in the union budget of 1998-99 and the lifting of the price ceiling on decontrolled fertilisers, both of which were rolled back, much to the disappointment of the majority of the industry players. On Aug 20, 1998, the centre announced the removal of price controls on decontrolled fertilisers for a period between October 1, 1998 and March 31, 2000. This was rolled back in a month of the announcement.

The rabi season especially is likely to be marred by poor availability of phosphatic fertilisers like diammonium phosphate (DAP) as the price was not declared. The shortage of the fertiliser is also likely to impact the crop output, say industry experts. The uncertainty regarding price fixation led to a drastic drop in imports of DAP and MOP. The shortfall in DAP is estimated to be around two million tonnes during the current season.

DAP prices which are currently ruling at Rs 8,300 per tonne at the farmgate level. The government also announced a Rs 500 per tonne hike in subsidy on decontrolledfertilisers for the rabi season.

An increase in the subsidy quantum was necessary considering that prices of key raw materials like phosphoric acid had increased which in turn had increased the manufacturing costs of producers.

Major manufacturers of DAP and other complex fertilisers are Rashtriya Chemicals & Fertilisers, Gujarat Narmada Valley Fertilisers & Chemicals, Zuari Agro, Deepak Fertilisers and Petrochemicals, Dharamsi Morarji Chemicals company, Rama Phosphates, EID Parry and SPIC.