Urea import dips for the third year in a row

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India’s urea import has dropped 7 per cent in 2023-24 fiscal, for the third consecutive year, thanks to increase in its domestic output and launch of nano-urea. Besides urea, there is also a decline in import of Di-ammonium Phosphate (DAP) and complex fertilizers, which led to overall imports falling 10 per cent in 2023-24 fiscal.

However, despite the reduction in import, the fertilizer subsidy last fiscal reached near ₹2-lakh crore, more than the ₹1.89-lakh crore Budgeted in the revised allocation. Experts point out the high subsidy to global prices and also increased sales, depite the government’s best efforts to reduce fertilizer offtake by farmers.

“Even if the import of finished products of fertilizers showing a negative trend, it is not actual fall as the ingredients are also imported. For instance, to produce urea one has to use gas as main feedstock and there is limitation on its domestic availability. Ultimately, the sales figures are the real indicators,” said SK Singh, an agriculture scientist.

Based on the latest official data, urea imports decreased to 70.42 lakh tonnes (lt) in the last fiscal year from 75.77 lt in 2022-23, a decline of 7.1 per cent. DAP imports remained stable at 55.14 lt (same level as in 2021-22) from 70.83 lt, marking a decrease of 22.2 per cent. Complex fertilizer varieties dropped to 21.87 lt from 27.52 lt, down by 20.5 per cent. However, Muriate of Potash (MoP) surged to 21.06 lt from 13.93 lt, showing an increase of 51.2 per cent, mainly attributed to a low base. A record 98.28 lt of urea was imported in 2020-21.

Production up

Urea production last fiscal jumped up 20.9 per cent to 314.07 lt. Domestic production of DAP (mainly through imported raw materials), which has a share of about 40 per cent in its total annual availability, jumped 6.8 per cent to 42.93 lt. In case of MoP, India imports the entire requirement.

Production of complex fertilizers, too, showed a jump of 9.7 per cent to 95.48 lt. But the target to produce 100 lt of of single super phosphate (SSP) could not be achieved as production dipped to 44.45 lt from 51.91 lt.

Imports, offtake

Import and consumption of urea largely depends on availability as it is completely controlled by the government. In case of potash and phosphorous, the selling price of these two fertilizers determine the consumption. The current MRP of DAP is ₹1,350/bag, whereas that of MoP is around ₹1,650 for a bag of 50 kg.

According to the Fertilizer Ministry, fertilizer consumption in the country increased 2.6 per cent to 600.79 lt in 2023-24. Of this, urea sales are almost on par at 357.81 lt against 356.75 lt year-ago. DAP sales edged up to 109.74 lt (105.19 lt), MoP sales was up from 16.28 lt to 16.44 lt and that of complex from 107.21 lt to 116.8 lt.