Fertiliser supplies are projected to remain under pressure this year because of sharp spurt in demand in the last kharif as well as the current rabi seasons. The fertiliser stocks, having already depleted considerably, are likely to be eroded completely by January-end. | |
| According to the Fertiliser Association of India (FAI), urea sales rose by over 10 per cent in the kharif season this year, reducing the inventories from 0.91 million tonnes at the beginning of the kharif 2005 to 0.62 million tonnes in the beginning of the current rabi. |
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| The inventory erosion was despite the factories responding positively to the government's call to produce more than 100 per cent of their production capacity. Besides, urea supplies from the Indo-Oman joint venture also started in June 2005. |
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| Urea supplies are again likely to exceed the demand in the rabi season that has just begun. The Fertiliser Association of India projects the total demand at 11.56 million tonnes, against the availability of around 11.3 million tonnes (10.49 million tonnes domestic output and 0.84 million tonnes imports. |
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| Similarly, the availability of di-ammonium phosphate (DAP) is also anticipated to be tight. While the domestic output of DAP dropped significantly, the demand increased by 6.4 per cent in the last kharif (compared with previous year's kharif demand). |
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| For the rabi season, the total availability of di-ammonium phosphate is reckoned at 3.42 million tonnes, including 2.97 million tonnes of indigenously produced and 0.45 million tonnes of imported DAP. This falls short of anticipated demand of 4.16 million tonnes. |
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| As a result, the DAP inventories, estimated at around 0.94 million tonnes on October 1 this year, are expected to be depleted wholly by the end of December. |
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| The shortfall of about a million tonnes of DAP production in 2005-06 is attributed, like in the previous year, to the delay in arranging supplies of phosphoric acid as a result of flawed government policies. |
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| There was an inordinate delay by the government in deciding the price of phosphoric acid to be taken for calculation of the rate of concession for DAP for the period April-June 2005. Even then the price was pegged at $ 431 a tonne, far lower than the price of $ 445 a tonne negotiated by the consumers' group (an industry body that negotiates the price with the suppliers). |
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| This led to capacity under-utilisation at many DAP plants. The Paradeep plant, in fact, remained closed throughout the year. It also forced the government to import DAP at a relatively high price and shell out higher subsidy on that. |
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