DAP price should be higher than all other fertilizers, says FAI
Supporting the government’s claim of adequate availability of the di-ammonium phosphate (DAP) in the current rabi sowing season, the Fertilizer Association of India (FAI) has suggested that the retail price of the phosphatic fertilizer should be on top of all other fertilizers to address the issue of soil health degradation.
Addressing media on the eve of its annual 3-day seminar, which will be inaugurated on December 4, FAI Chairman N Suresh Krishnan said: “The only challenge is price (MRP) as DAP has been priced at ₹1,350/bag (of 50 kg). There is an artificial demand which is taking place for DAP, and had it been priced right, maybe that artificial demand might not have happened.”
The government data show that maximum retail prices of muriate of potash (MOP) was ₹1,500-₹1,550 per bag (of 50 kg), and complex was in the range of ₹1,230-₹1,700/bag. Urea’s selling price remains at ₹267/bag (of 45 kg) which has not been changed since more than a decade.
The price of imported urea (FOB) has dipped by 8.44 per cent to $369/tonne in October from $403 year-ago and that of MOP (CFR) fell by 11.29 per cent to $283/tonne from $319. But, the price of DAP (CFR) has increased 7.9 per cent to $642/tonne from $595.
Volatile prices
He further said the government wanted a stable price for the farmers amid high fluctuation in DAP prices globally, though the policy has allowed companies to fix their rates after a fixed subsidy. However, to ensure the stable price for the farmers, the government has made a policy decision to bear entire subsidy above a benchmark rate.
Krishnan said global prices are fluctuating quite a bit in the market now as it was seen DAP going well over $1,000 also (in the past), but now hovering between $630 and $640 a tonne.
FAI officials said the government has taken a clear position that the farmer is not put to a disadvantage amid the price fluctuations DAP, primarily because of global geopolitical issues. The government has always been proactively supporting the fertilizer sector, they adeed.
Currently the government subsidy on DAP is close to Rs 1,225 per bag and if that kind of a price continues and also if the global prices are going to be over and above the current levels, maybe the current prices (MRP) have to be be revised, industry officials said adding that DAP being a premium product, the farmer should be able to pay the premium pricing for it.
Krishnan also said there has been more complex fertilisers (combination of N, P, K nutrients) consumed during current season, and hoped that the trend would continue in future. “That’s good for the soil, good for the crop. Because a more balanced fertilizer usage is happening,” he said.
Asked about lower application of DAP affecting yield, he said yields don’t get affected as the higher application of complex is good for the crop.
The fertilizer supply position is reported to be comfortable for urea, MOP, NPK, and SSP. However, the opening stock of DAP as of October 1 this year was 9.53 lakh tonnes, lower compared to the same period last year, according to the minutes of the Crop Weather Watch Group meeting. Data show that the opening balance in current rabi season was 17.75 lt (25.41 lt).
Latest official data show that the sales of DAP were recorded at 11.48 lt in October 2024, which is 16 per cent lower than 13.64 lt a year ago. The estimated demand for October was pegged at 18.69 lt by States. The import of DAP surged 58.6 per cent to 8.17 lt in October from 5.15 lt in the corresponding period last year.
Krishnan said in November, sales improved and the industry has assured the government about uninterrupted supply.
Commenting on the global supply scenario, he said India used to buy 20 lt from China out of an annual import of around 60 lt against a consumption of 100 lt per year. However, as supplies from China declined to 5 lt, possibly to meet its own increased demand, there were issues to find alternative sourcing destinations.