To promote the balanced use of fertilizers, the fertilizer industry has demanded that the prices of fertilizers should be fixed based on nutritional value. Among non-urea fertilizers, the price of DAP should be the highest because it has the highest nutritional value.
In a press conference regarding the annual conference of the Fertilizer Association of India (FAI) to be held on December 4, FAI Chairman N. Suresh Krishnan emphasized fixing the prices of non-urea fertilizers based on their nutritional value. Advocating a price hierarchy in fertilizers based on nutritional value, Krishnan said that DAP should command the maximum price because of its high nutrient value. After DAP, the prices of MOP and other NP/NPK and SSP fertilizers should be fixed according to the nutritional value. This will promote the balanced use of fertilizers.
The suggestion of keeping the price of DAP high by the fertilizer industry has come at a time when reports of DAP shortage are coming from various parts of the country. However, the FAI chairman claimed adequate availability of DAP in the country and said that the situation has improved due to the import of DAP in October and November. Along with this, the consumption of other NPK fertilizers has also increased.
At present, the price of DAP is Rs 1350 per bag, Muriate of Potash (MOP) is priced at Rs 1500 to Rs 1600 per bag, NP (20:20) is priced at Rs 1200-1300 per bag and NPK (12:32:16) is priced at Rs 1470 per bag.
Reduction in production, import and sale of DAP
According to FAI data, during April and October this year, the country's DAP production declined by 7.4 percent while DAP imports decreased by 29.8 percent compared to last year. During this period, DAP sales declined by 25.4 percent while MOP sales increased by 24.7 percent and NPK sales increased by 23.5 percent. These figures show that the use of NP/NPK fertilizers has increased with the decline in DAP sales. The fertilizer industry is considering this a good sign.
Reasons for reduction in DAP imports
FAI Chairman attributed the decline in DAP imports from China, geopolitical tensions and problems in transportation through the Red Sea as the reasons behind the reduction in DAP imports. Apart from this, imports were also affected due to limited DAP production capacities in the global market and volatilities in the international price.
India meets more than 90 percent of its phosphatic fertilizers requirement through imports either in the form of raw materials or finished products. India’s annual demand for DAP is around 100 lakh tonnes, of which about 60 percent is met by imports.
Rabi sowing season will be long
Krishnan says that DAP sales have increased in November. Also, due to less cold in November, the Rabi sowing season will be prolonged, which will help in meeting the demand for DAP. After the central government announced new subsidy rates for P&K fertilizers in September, DAP imports in the country have increased, which will improve the availability of DAP.
Urea prices in the country are under government control, while 28 P&K fertilizers including DAP and NPK are decontrolled, on which the government provides subsidies to fertilizer companies under the Nutrient Based Subsidy Scheme (NBS).