Govt taking no chances on fertiliser

The country could be facing a bad monsoon but the government is taking no chances on fertiliser supply. For the summer crop, it has asked fertiliser companies to plan for normal requirement.

A senior government official told Business Standard the urea requirement for the kharif season is 17 million tonnes. "We are planning for normal monsoon so that there are no surprises," he said. In April, the import of a million tones of urea had already been finalised.

Urea is the only fertiliser for which the government plans import through three state trading enterprises - Indian Potash Ltd (IPL), MMTC and STC -- to meet the domestic shortfall. India produces about 22 mt against an annual domestic demand of 33 mt. The import requirement hovers around 11 mt, with two mt coming from Kribcho's Oman joint venture.

Of India's annual total production of foodgrain, the greater half comes from the summer crop, sowing for which starts around June and the harvest in September-October. Paddy, maize, pulses like moong, urad and tur, and oilseeds like soybean and groundnut, plus cash crops like cotton and sugarcane are all grown during the kharif season.

The DAP fertilizer requirement for the season is estimated at five mt, NPK at five mt and MoP at 1.5 mt. The consumption of these three non-urea fertilisers has already dipped due to a new subsidy regime from April 2012, under which a fixed amount is given to companies. While the consumption of DAP fell 10 per cent to nine mt in 2012-13 over 2009-10, that of MoP more than halved to 2.1 mt. In the case of NPK, consumption has gone down by about five per cent from 8.2 mt in 2009-10. "There is more judicious use of fertiliser because of higher price of non-urea fertiliser under the nutrient- based subsidy scheme. The new regime also brought down smuggling of subsidised fertiliser to neighbouring countries," said the official.

The final yield of crops such as rice, pulses and oilseeds depend on the extent of fertiliser use. However, in years when the monsoon is not good, the consumption goes down. In 2014, the southwest monsoon season, which starts in June and ends in September, is expected to play truant to some extent, which could impact the demand. The metrological office has predicted a 60 per cent chance of the El Niño weather phenomenon, which causes low rains, impacting India's southwest monsoon.