At ₹45,242.01 crore, 28% of BE fertilizer subsidy exhausted during April-July

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Fertilizer subsidy has reached ₹45,242.01 crore during the April-July period of the current fiscal was ₹45,242.01 crore , which is 28 per cent of ₹1,64,000 crore budgeted this fiscal, even as there is 30 per cent drop in overall import of key chemical fertilizers. Experts warn that the subsidy may exceed the budgeted amount if the global prices rise further.

According to the latest official data, the subsidy on urea has reached ₹32,461.52 crore and that of phosphate (P) and potash (K) at ₹12,759.32 crore in the first four months of the 2024-25 fiscal.

Of the total Budget allocation ₹45,000 crore for phosphorus (P) and potassium (K) subsidy, 28.4 per cent has been exhausted until July. The government will soon announce the subsidy for the upcoming rabi season (October-March) for P and K fertilizers.

In 2022-23, India’s fertilizer subsidy reached a record ₹2.25 lakh crore after a global price surge and current imported prices were lower from those highs. But, recently prices of N and P have started moving up. Price of imported urea increased by nearly 26 per cent to $354/tonne (FOB) in July from $282 in the year ago period and that of Di-ammonium Phosphate (DAP) surged 30 per cent to $572/tonne (CFR) in July from $440.

Imports down

The Fertilizer Ministry data showed that DAP import declined 44.9 per cent to 14.66 lakh tonnes (lt) during April-July from 26.59 lt year-ago and urea import dipped 31.7 per cent to 10.15 lt from 14.87 lt.

Import of overall fertilizers dropped 29.6 per cent to 42.49 lt during April-July from 60.33 lt year-ago, in which that of Muriate of Potash (MOP) fell by 24.2 per cent to 7.32 lt from 9.66 lt. But, import of complex fertilizers rose 12.5 per cent to 10.36 lt from 9.21 lt. Complex fertilizer is a combination of nitrogen (N), P, K and sulphur (S) nutrients.

The overall sales (consumption) of key fertilizers – urea, DAP, MOP and complex – increased 5.7 per cent to 184.25 lt, whereas the demand was estimated at 210.61 lt for the April-July period. But, sales of DAP dropped 14.5 per cent to 29.64 lt.

Sales of urea during were 1.6 per cent higher at 108.87 lt , while those of MOP rose 36.8 per cent to 4.94 lt and complex increased by 40.8 per cent to 40.8 lt.