The Hindu Business Line : Urea: Position comparatively better

New Delhi June 20 The supply position of urea is somewhat better in relation to di-ammonium phosphate (DAP). As against a total kharif consumption of 126.83 lakh tonnes (lt) projected for kharif 2007, domestic production is assessed at 98.59 lt, with import requirement being 28.24 lt.

Out of the 28.24 lt, 8.5 lt imports is to take place through the Oman India Fertiliser Company (OMIFCO), a 25:25:50 joint venture of the Indian Farmers Fertiliser Cooperative (Iffco), Krishak Bharati Cooperative (Kribhco) and the Oman Oil Company. In addition, Indian Potash Ltd (IPL) and MMTC have contracted for another 18 lt, which leaves only small gap of less than two lt. But the problem is on the price front.

Last year, imports (other than through OMIFCO) were made at around $250 per tonne cost & freight, whereas this time they have been contracted at $340-345, which would translate into a higher fertiliser subsidy outgo for the Centre.

The OMIFCO route has, to an extent, helped in insulating against the volatility in international prices.

Under a long-term supply contract, OMIFCO urea was imported at $155 per tonne in 2005-06 and $166.50 in 2006-07, while being contracted this year at about $175 per tonne.

Of no less concern is the sheer volume of imports, which have, since 2000-01, risen from zero to 47.19 lt for urea and from 8.61 lt to 28.75 lt for DAP.

At a time when the country also has to import huge quantities of wheat, there are associated problems of port congestion, which, in turn, affects shipments of oil meals, sugar and other bulk export cargo.