Govt importing fertilisers as demand outpaces supply

The country is facing a shortage of key fertilisers, prompting authorities to arrange for their import, the government said on Friday, but maintained that the demand-supply gap was not owing to a dip in production.

Explaining the matter, minister of state for fertilisers Srikant Kumar Jena said there were constraints in the supply of di-ammonium phosphate, which was being met through imports. Even so, “there is no sufficient supply of MoP (muriate of potash) in the international market,” he told the Rajya Sabha.

Earlier this month, Belarusian Potash Company agreed to contract with the Indian Potash Limited, the country’s major fertiliser importer, for delivering a total of 1.2 million tonnes potash fertiliser from this month to March next year. The delivery price was set at $490 per tonne.

In another written reply, the minister told the Upper House said that the production in 2008-09, 09-10 and 10-11 was 331.48 LMT, 368.26 LMT and 376.35 LMT respectively, which only showed a rise in the profile.

Moreover, the government has initiated proceedings to bring urea under the Nutrient Based Subsidy Regime and, at a later stage, make it free to market prices. Agricultural experts appreciated this move, as this would result in a proper and balanced use of N, P and K nutrient-based fertilisers. The lack of uniformity in subsidy resulted in to over use of Urea, which continues to be highly subsidised.

As for urea, its supply was “sufficient” in the country. The minister urged the state governments to ensure the supply of fertilisers, which is highly subsidised. The subsidy bill is to the tune of Rs 90,000 crore to 1,00,000 crore this financial year.

On closed fertiliser units, Jena said the government has started the process for revival of eight fertiliser plants closed in 2002.

The Group of Minister on fertilisers has constituted a committee chaired by Saumitra Chaudhuri, member of the Planning Commission, for formulating amendment to the new investment policy of 2008 to attract investments. The policy aims at expansion and revival of existing urea units.