The Hindu Business Line : Fertiliser shortfall likely in kharif season

Subsidy release
Production also is likely to be hit because the Government has released only Rs 1,500 crore subsidy for April and May.
Di-ammonium phosphate units may run out of stocks if the Government does not fix phosphoric acid prices soon.

New Delhi April 7 The coming kharif season could well witness shortfall of all the three major fertilisers, urea, diammonium phosphate (DAP) and muriate of potash (MoP), adding to the woes of the farm sector.

This is because, for the first time in recent history, the State-wise supply plan for urea has not been received from the Government even after the first week has passed since the kharif season started on April 1. Normally, both for the rabi and kharif season, the supply plan is given to the industry one month in advance, fertiliser manufacturers told Business Line.

Worst hit would be urea for which 50 per cent of the requirement is controlled by the Government.

Fertiliser Ministry officials, when contacted, said the plan had been approved on Wednesday and even if the fertiliser units have not received it by now they would get it by next week.

Production also is likely to be hit because the Government has released only Rs 1,500 crore subsidy for the month of April and May while the carry-over of 2006-07 is more than Rs 11,000 crore.

"Even if we balance this amount with the backlog carry-over, then it would take till September to clear last year's carry-over. The companies are in major financial crunch, particularly because the suppliers of key raw materials such as gas, naphtha, fuel oil, etc, which are mostly public sector companies, are ready to supply only against cash payment."

On DAP, MoP front

In the case of DAP, the key raw material is phosphoric acid. The phosphoric acid consumer group within the fertiliser industry had negotiated a price of $461.25 per tonne based on the formula recommended by the Abhijit Sen committee set up by the Ministry.

By the same formula this year's price would be close to $700 per tonne, which the fertiliser industry feels is unlikely to be accepted by the Government.

"We have asked the Government to have their representatives during the negotiating process. Even then, whenever India enters the global market, prices shoot up. Unless the prices are determined soon most of the DAP units will run out of stock and this has become an annual feature," Fertiliser Association of India officials said.

In case of MoP, almost the entire requirement is imported and there has been no progress on that front, industry officials said.

The National Campaign on Agriculture for Kharif Campaign 2007-08 has assessed the requirement of urea, DAP and MoP would be 135.62 lakh tonnes, 40.08 lakh tonnes and 16.5 lakh tonnes, respectively, excluding pipeline requirement.

During the campaign, which took place on April 3 and 4, the Government had assured that it would ensure that the availability of fertilisers to the farmers, including pipeline, was fully met.

The Government had also assured that the prices of raw materials and finished products for the purpose of subsidy would be decided in time to ensure availability.

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