Complex fertilizers sales up by 50 per cent amidst DAP shortage

There has been a massive increase in complex fertilizers sales because of the Di-Ammonium Phosphate (DAP) availability crisis due to the record increase in global prices. An increase of about 50 per cent was registered in the sales of these fertilizers during the months of October and November in the current Rabi season. According to the figures from the Department of Fertilizers (DoF), the sales of complex fertilizers reached 27.7 lakh tonnes (lt) during October-November 2021, which stood at 18.48 lt over these two months last year.

Farmers use more of DAP and Muriate of Potash (MOP) during the sowing of wheat, mustard and potato, the major crops of the Rabi season. But, amidst the troubles created with regard to DAP availability this year, farmers have used more of Single Super Phosphate (SSP) and complex fertilizers like Nitrogen, Phosphorus and Potash (NPK) because these were better available. This is despite the fact that companies have increased the prices of the grades of these fertilizers that have higher consumption and these are dearer compared to last year even after an increase in subsidy.

The government had announced an additional subsidy of Rs 100 per bag on three of the various grades of these fertilizers containing Nitrogen (N), Phosphorus (P), Potash (K) and Sulphur (S). The companies sold these earlier for Rs 1,085-Rs 1,100 per bag but their prices have now reached as high as Rs 1,470 per bag. On the other hand, in order to maintain the DAP price at Rs 1,200 per bag (50 kg) for the farmers, the government has increased the subsidy accordingly to offset the high raw material prices. However, there were reports of DAP scarcity from several parts of the country during October-November.

Meanwhile, similar to the increase in complex fertilizers sales, the SSP sales stood at 15.78 lt during October-November 2021 in comparison to 9.5 lt over these two months last year.

According to the figures from DoF, the DAP sales stood at 28.76 lt during October-November 2021, which is 18. 4 per cent less than those at 35.23 lt during the same period in 2020. Besides, the MOP sales stood at 4.88 lt during October-November in the current year, a fall of 15.9 per cent in comparison to the sales of 5.8 lt over these two months in 2020.

The urea sales rose by 12.6 per cent in comparison to last year and reached 51.92 lt during October-November this year.  However, if we compare this to the corresponding two months in 2019, the increase is a mere 3.8 per cent. During October-November 2019, the urea sales had stood at 50.04 lt.

The fertilizer industry says that the increase in the sales of complex fertilizers and DAP is a positive signal for this would reduce the dependence on DAP. The prices of rock phosphate and phosphoric acid, the raw materials for DAP, have registered a massive increase over the last year. The price of imported DAP is $870 per tonne at present while the prices of imported urea and MOP have gone up to $1,000 and $450 per tonne respectively. Last year, the price of imported DAP stood at $370 per tonne, that of imported urea $280 per tonne and that of imported MOP at $230 per tonne.

In terms of fertilizer consumption in the country, there is a larger consumption of complex fertilizers in the southern and western states while the northern states have been consuming more of DAP and MOP. But the trend is changing this year. And the fertilizer industry sees this as a positive signal. The total consumption of fertilizers in the country was 676.10 lt in the last financial year 2020-21. Of this, the consumption of urea was 350.43 lt. The consumption of DAP stood at 119.12 lt while that of complex fertilizers stood at 118.11 lt. The remaining part consisted of 44.89 lt of SSP and 34.25 lt of MOP. Industry sources say that the total DAP sales are likely to be less in the current year.