India’s fertilizers sale up in Apr-May on beneficial monsoon, but DAP offtake down
Fertilizer sales in India increased by 3.6 per cent o 50.7 lakh tonnes (lt) in April-May of the current fiscal as good rainfall in the growing areas had helped increase the offtake.
As fertilizer usage in kharif season is linked to rainfall, good rainfall over all regions, except a few States which were deficient until 10 days ago, has helped increase demand for the crop nutrients. The pan-India rainfall stands at 1 per cent above its long period average during June 1- July 24, IMD data show. Only 11 States covering 22 per cent of geographical area are deficient.
At the same time, experts said the rise in sales was due to the base effect as there was a drop during April-May 2023. Consumption of fertilizers dropped nearly 2 per cent, including 3 per cent fall in urea during April-May last year. Consumption of fertilizers was 48.9 lt in the year-ago period.
However, di-ammonium phosphate (DAP) sales declined by 9.3 per cent to 8.8 lt. With current fall in DAP sales, global prices should come under pressure as India is among top buyers of the phosphatic fertilizer, industry sources said.
MOP sales up 52%
When DAP sales increase, overseas sellers raise their prices as they know that the Government has to bear subsidy burden to maintain the maximum retail price (₹1,350/bag of 50 kg) for the farmer.
According to latest official data, overall consumption of urea in first two months of current fiscal increased 2 per cent to 31.8 lt from 31.2 lt a year ago. Similarly, Muriate of Potash (MOP) rose 53.2 per cent at 1.7 lt against 1.11 lt and complex increased by 21 per cent to 8.4 lt from 6.94 lt a year ago. Complex fertilizer is a combination of nitrogen (N), phosphorous (P), potash (K) and sulphur (S) nutrients.
Amid the government’s target to make the country self-sufficient in urea by 2025, there has been a marginal drop in import to 6.4 lt from 6.92 lt in April-May. As urea is completely controlled by the Government, including its import by some select agencies, the industry does not have any issue except timely payment of subsidy. There was record import of urea at 98.28 lt during FY 2020-21.
Imports too fall
Import of overall fertilizers dropped by 12.5 per cent to 24.5 lt during April-May from 28 lt a year ago, in which complex import declined maximum by 22.1 per cent at 4.5 lt from 5.78 lt and that of DAP by 18.8 per cent to 8.5 lt from 10.47 lt. Only MOP import surged 5.6 per cent to 5.1 lt from 4.83 lt.
Production of all fertilizers was a tad lower at 81.2 lt from 82.04 lt, which included urea at 51 lt (49.8 lt), DAP 6.6 lt (7.86 lt), complex 15.9 lt (15.68 lt) and SSP 7.7 lt (8.7 lt).