The country?s largest fertiliser cooperative, Iffco, said on Thursday that it will not hike the retail prices of fertilisers over rupee depreciation as some of its global suppliers have agreed to cut prices by 5%.
?Some of our suppliers have agreed to reduce the price of diammonium phosphate by $35 a tonne and nitrogen-phosphorous-potash fertilisers by $25 a tonne, translating to a 5% price reduction,? Iffco managing director US Awasthi told FE.
The reduced prices are applicable for four months on consignments to be shipped from December 1, 2011. Accordingly, Iffco will not raise the retail price of fertilisers even though the rupee is now at R52.16 against the dollar, weaker by 18% since the beginning of the fiscal. Awasthi declined to give the names of the companies that have agreed to cut prices already but said that others are in the process of making similar concessions.
Iffco had on Tuesday urged its suppliers such as Belarusian Potash Company (BPC), Canada?s Canpotex and Russia?s Uralkali to cut the price of fertilisers by $36 to $50 per tonne as the Indian importer?s costs have gone up due to a weaker rupee. Iffco was not in a position to raise prices for the farmers as retail prices have sharply gone up in the recent past due to high global prices and a weaker domestic currency.
Prices of phosphorous and potash fertilisers have doubled since the beginning of this fiscal. India is dependent on imports for all its potash requirement and most of its phosphorous requirement.
India is importing 5.5 million tonne of potash this fiscal for a price of $470 a tonne in the second and third quarters, and at $530 a tonne in the last quarter. Muriate of potash is imported at $658 a tonne. Iffco sells DAP at R18,100 per tonne and NPK fertilisers at R16,000 a tonne.
The government had partially decontrolled the prices of phosphorous and potash fertilisers last fiscal but continue to give some subsidy as the high global commodity prices have led to a sharp increase in local prices too.