Home Business Rising DAP, potash costs dampen kharif yield prospects

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 increased by 5 million tonne in FY21. Since non-urea (MoP, DAP, complex) varieties cost higher, many farmers prefer to use more urea than actually needed.

Already urea costs have come down by USD 40 to USD 340 from USD 380 per tonne, he mentioned.

As costs of diammonium phosphate (DAP) and complicated 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 would cut back crop yield as farmers resort to extreme use of subsidised fertiliser urea as a substitute.

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

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 It has, nevertheless, mentioned that about 11.26 lakh tonne of complicated fertilisers would nonetheless be bought at outdated charges since these have been manufactured previous to the hike in world costs of the important thing uncooked materials.

“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 mentioned in a press release on Thursday.

An inner letter from IFFCO’s advertising director Yogendra Kumar to managers informing them in regards to the new charges had gone viral, producing a robust response 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 mentioned.

The brand new costs of complicated fertilisers are tentative because the worldwide costs of the uncooked supplies are but to be finalised by corporations, he mentioned. “Indeed, there is a sharp increase seen in the trends of international raw material prices.”

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 similar to 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 firstly of yearly. Fertiliser corporations are allowed to repair the MSP of those non-urea crop vitamins primarily based on market charges. The nation is totally 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, complicated) varieties price greater, many farmers favor to make use of extra urea than truly wanted.

The Centre has not modified the utmost retail worth (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 prices in 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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