The Hindu Business Line : Fertiliser body warns of phosphatic product shortages

“The liquidity position of the companies has reached a stage beyond which it will not be possible for them to continue with import and production of fertilisers in the country.”

Our Bureau

New Delhi, June 24

The Fertiliser Association of India (FAI) today said that its member companies will not be in a position to import and produce fertilisers any more because of liquidity problems and that may lead to shortages in phosphatic (P) and potassic (K) fertilisers.

Stating that the country is heavily dependent on import of phosphoric acid and sulphur/sulphuric acid for production of phosphatic fertilisers, the FAI said that export of these products should be stopped to increase availability.

“The export of these products accentuates their non-availability. As such the export of sulphuric acid and phosphoric acid should be immediately banned,” the FAI says.

Stating that total outstanding subsidy payment for fertiliser to the companies by the Government till June 30 would be around Rs 28,000-30,000 crore, the FAI, in an official release said that “the liquidity position of the companies has reached a stage beyond which it will not be possible for them to continue with import and production of fertilisers in the country,”

However, there is no problem with urea as there is adequate domestic capacity and the capacity utilisation is high. The problems of P&K-based fertiliser units are further accentuated because there is no approved policy on P&K fertilisers as the earlier one expired on March 31 this year, the FAI said.

“Even though three months have lapsed, P&K fertiliser policy has not been approved and notified by the Government for the ongoing kharif season. As such the industry does not know the cost of raw materials or finished fertilisers that will meet Government approval,” the FAI release said.

The fertiliser association also pointed out that international prices of raw materials and finished fertilisers are steeply rising and, consequently, the subsidy bill of the Government as well.

As the Budget allocation of Rs 30,986 crore for 2008-09 on fertiliser subsidy account is grossly inadequate, it needs to be substantially enhanced during the monsoon season because almost the entire yearly allocation gets exhausted in the first three months alone, it said.

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