In the last Kharif season, there has been a decline in the sales of urea in the country due to many reasons, including weak monsoon. Due to continuous import and commencement of production in some new plants, the stock of urea in the country has crossed 100 lakh tonnes.
The stock of urea on March 31 this year was 88 lakh tonnes whereas at the same time last year the stock of urea was 65 lakh tonnes.
Sources associated with the fertilizer industry say that the decline in sales along with increase in production is the reason for increase in urea stock. The stock of urea in the country has reached the highest level in the last decade. This has increased the concern of fertilizer companies.
Despite the India Meteorological Department (IMD)'s claim that the south-west monsoon was normal last year, many parts of the country received very little rainfall in the Kharif season. Due to this, the production of most of the crops fell in the Kharif season. The lack of rainfall had a direct impact on the consumption of urea.
At the same time, even during Rabi season, a large part of the country remained untouched by winter rains. This has also affected the consumption of urea. While the production of crops fell in Kharif season due to less rainfall, the production of most of the crops including pulses and oilseeds is expected to be less in Rabi season also.
The situation is not clear yet in the case of wheat, however, there is information about the crop being weak in Madhya Pradesh and till now the government procurement of wheat in the current Rabi Marketing Season (RMS) 2024-25 is less than last year.
Fertilizer companies are reviewing the reduction in urea consumption. But the weak growth rate of the agriculture sector in the last financial year (2023-24) is enough to explain the reality of decline in agricultural production. Weak agricultural production is directly related to consumption of fertilizers. The government has been continuously trying to reduce the consumption of urea and as part of this strategy, the weight of the urea bag was increased to 45 kg. Despite this, urea consumption has increased in the last two years. But now looking at the outstanding stock figures, it seems that urea sales in 2023-24 will be less than 2022-23.
About 350 lakh tonnes of urea is consumed every year in the country. Out of this, about 240 to 250 lakh tonnes is produced in the country and more than 100 lakh tonnes of urea is imported. Industry sources told Rural Voice that while the sales of urea decreased this year, imports also continued. Apart from this, supply has increased due to the commencement of production in production units like HURL and Matix.
Due to this, the stock of urea has reached record level. In this situation, it seems that urea imports may decrease in the coming days. More demand for urea for the Kharif season will emerge only after about two months. In such a situation, the available stock may increase further.