As costs of diammonium phosphate (DAP) and complicated fertilisers have surged in the intentional market place in current months, domestic fertiliser organizations have hiked costs for the upcoming kharif season steeply, in a move that could decrease crop yield as farmers resort to excessive use of subsidised fertiliser urea alternatively.
Prices of phosphatic and potassic fertilisers are determined by the market place as subsidies supplied by the government are minimal and fixed. These fertilisers are largely imported.
Fertiliser cooperative IFFCO hiked costs of DAP and complicated fertilisers by 46-58% for supplies from new worldwide contracts for inputs, compared to the rabi season. It has, even so, stated that about 11.26 lakh tonne of complicated fertilisers would nevertheless be sold at old prices considering that these had been manufactured prior to the hike in worldwide costs of the essential raw material.
“We at IFFCO will ensure that there is enough material in the market with old rates and I have instructed the marketing team to sell only previously packed material with old rates to farmers. We always take decision by keeping a farmer-first approach,” IFFCO’s managing director US Awasthi stated in a statement on Thursday.
An internal letter from IFFCO’s promoting director Yogendra Kumar to managers informing them about the new prices had gone viral, producing a sturdy reaction on social media.
“We at IFFCO, take strong objection [to] tweets or news linking any political party or government for increase in price of complex fertilisers (mixture of N, P, K and S). They are decontrolled, hence, [there is] no linkage to any political party or government,” Awasthi stated.
The new costs of complicated fertilisers are tentative as the international costs of the raw components are but to be finalised by organizations, he stated. “Indeed, there is a sharp increase seen in the trends of international raw material prices.”
The landed charges of imported DAP is now at about $540 per tonne (Rs 40,281), up from about $400 in October. Similarly, the costs of intermediates such as ammonia and sulphur have also gone up from about $280 and $85 per tonne to $500 and $220 per tonne, respectively. Muriate of potash (MoP) prices have surged to $280 from $230 through the very same period.
The government deregulated costs of potash and phosphatic fertilisers in 2010 by agreeing to spend a fixed quantity of subsidy to be decided at the starting of just about every year. Fertiliser organizations are permitted to repair the MSP of these non-urea crop nutrients based on market place prices. The nation is totally dependent on import for potash, when 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 improved by 5 million tonne in FY21. Since non-urea (MoP, DAP, complicated) varieties price greater, a lot of farmers choose to use more urea than essentially necessary.
The Centre has not changed the maximum retail cost (MRP) of urea considering that 2012, when it was improved by Rs 50/tonne to Rs 5,360/tonne. The MRP of a 45 kg bag of urea is Rs 242 and that of a 50 kg bag is Rs 268, all costs exclusive of charges towards neem coating and taxes as applicable. Compared to this, a 50 kg bag of DAP charges Rs 1,900.
The government’s total outgo on fertiliser subsidy has been pegged at Rs 79,530 crore for FY22, of which Rs 58,767 crore has been budgeted only for urea.