The Hindu Business Line : Sulphur prices hit fertiliser output

Kochi, Nov. 27 Increasing demand over supply for sulphur in recent months in the world market has increased its price several fold putting non-gas-based fertiliser units in the country in serious crisis.

One of the major victims is the ailing Central public sector Fertilisers and Chemicals, Travancore Ltd (FACT) in Kerala. The unit, which has been making an annual average loss of around Rs 150 crore, is said to be holding an inventory of sulphur that may last hardly for two weeks at current reduced level of production.

The production of Factumphos has to be cut down and that in turn had created severe shortage of this fertiliser in Tamil Nadu, Karnataka and Andhra Pradesh where the FACT has been catering to the requirement of the farmers, sources told Business Line.

At present one-third of the demand is met. Even in Kerala as against the daily demand of 200 tonnes, only 30 tonnes could be sold, they said.

The farmers in the South depend on the fertiliser plants in this part of the country and most of them being naphtha-based the rising sulphur price has negatively affected production of fertilisers in these units. Hence, ensuring production in the units located in the South acquires momentum in the interest of the farmers and agriculture production in the region, they said.

The price of sulphur is around $390 a tonne against $88 at this time last year, they said. At this rate, the production cost would come to around Rs 15,000 a tonne.

Therefore, if the Government increased the subsidy for sulphur, the fertiliser company could import sulphur at the current price and continue manufacturing of the products. The present level of subsidy is Rs 4,000 a tonne and the selling price of factumphos is Rs 7,800 a tonne, they said.

Landing cost

On the other hand, the landing cost of finished fertiliser products is also on the higher side, making indigenous production even at the present sulphur price profitable, they claimed.

According to industry sources, India imports 1.5 million tonnes of sulphur a year mostly countries such as Iran, the UAE, Kuwait, Qatar and Saudi Arabia and from Russia to produce sulphuric acid for manufacturing phosphoric acid.

In fact, sulphur imports had declined by a quarter in the past 10 years, may be due to increase in the import of phosphoric acid, they said.

The price of sulphur which remained around $74-77 a tonne CFR India is witnessing an uptrend following a shortfall in production, increased demand from China and increased freight rate.

The major consumers of sulphur in the world using more than one million a year are producers of fertilisers such as the US, Morocco, Tunisia, India, China and Brazil. Main sulphur producers include the US, Canada, Russia, Kazakhstan, China, Japan, Germany and Saudi Arabia, which account for 65 per cent of global volume, they said.

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