Assured import commitments for non-urea fertilisers | The Financial Express

Assured import commitments for non-urea fertilisers

MoUs with Morocco and Egypt soon

fertilizer, economy
In August last year, India and Saudi Arabia had signed a pact for an annual supply of 2.5 MT of ammonia and DAP, NPK fertilisers till 2025. (IE)

To ensure stability in the supplies of soil nutrients, India will be soon signing long-term deals with Morocco and Egypt for assured imports of non-urea fertilisers.

Sources said that the MoUs with these two countries would be for import of rock phosphate, a key raw material used in manufacturing of di-ammonium phosphate (DAP) and nitrogen-phosphorus-potassium (NPK).

Currently there are discussions going for assured export commitment of non-urea fertiliser such DAP and NPK from countries including Senegal, Jordan, Israel, Oman, Russia, Canada and Saudi Arabia.

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“In the short term, we are focussing on signing MoUs with Morocco and Egypt to secure long term deals for fertiliser imports,” an ministry official told FE.

Nearly half of country’s DAP requirements are imported via (mainly from West Asia and Jordan) while the domestic Muriate of potash (MoP) demand is met solely through imports (from Belarus, Canada and Jordan, etc). India also imports about 20% of its annual consumption of urea.

Fertiliser minister Mansukh Mandaviya last week said that in the next two years India will be a price settler for fertiliser in the global market.

“We are increasing domestic production and making long term arrangements for imports with exporter countries. It will give us an opportunity to get fertiliser at our price,” he said, citing that the import price of DAP had been brought down from $ 1000/ tonne prevailed in April, 2022 to around $ 750/tonne currently.

In October, 2022, Rashtriya Chemicals and Fertilizers Ltd signed MoU with K Plus S Middle East FZE DMCC, a subsidiary of Germany’s K+S Minerals and Agriculture GmBH for supply of around 0.1 million tonne (MT) of Muriate of Potash (MOP) annually till 2025 at a discounted India specific price.

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Coromandel International, Chambal Fertilizers and Indian Potash Limited in September, 2022 signed an MoU with Canpotex, Canada for import of potash

In August last year, India and Saudi Arabia had signed a pact for an annual supply of 2.5 MT of ammonia and DAP, NPK fertilisers till 2025.

Last month Mandaviya had said that global manufacturers for artificially hiking the prices of soil nutrients in the last one year taking the advantage of supply disruption caused by Russia-Ukraine conflict. He stated that the market must determine the global prices of fertiliser.

The government is aiming at attaining self-sufficiency in urea through increasing production of nano-urea by 2025. At present, 50 million bottles of nano-urea are manufactured in the country and through setting up new plants the country’s annual production capacity of nano urea to 170 million bottles by 2023 which is equivalent to 7.5 MT of urea.

Out of total annual demand of 35 MT of urea, close to 29 MT is domestically produced and rest is imported.

Sources said that the government’s fertiliser subsidy expenses are likely to be around 2.5 trillion in this fiscal but may see a fall in 2023-24 because of recent moderation in global prices.

The subsidy on farm nutrients stood at Rs 1.6 trillion (revised estimate) in FY22. The government has stated that it would not pass on the burden of rise in global prices to farmers.

In case of urea, farmers pay a fixed price Rs 242 per bag (45 kg) against the cost of production of around Rs 2,650 per bag. The balance is provided by the government as a subsidy to fertiliser units

The retail prices of phosphatic and potassic (P&k) fertiliser, including DAP were ‘decontrolled’ in 2020 with the introduction of a ‘fixed-subsidy’ regime as part of Nutrient Based Subsidy mechanism announced by the government twice in a year.

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First published on: 16-01-2023 at 02:30 IST