Enthused by the Government’s latest reforms drive, fertiliser makers want the Centre to initiate such an exercise in the urea sector as well.

To begin with, they want a hike in the price of urea, which is heavily subsidised at present.

“The hike in urea prices will not only help reduce the rising subsidy bill, but also prevent the adverse impact on soil health,” said A. Vellayan, Chairman, Fertiliser Association of India.

The huge price differential in price of urea and non-urea complexes has led to the indiscriminate use of the nutrient for the second year, resulting in imbalanced fertigation.

The effect of imbalanced usage comes with a lag and food production will be impacted in a year or two, Vellayan said.

Urea is currently priced at Rs 5,340 a tonne, while complexes such as DAP and NPK are quoted at Rs 24,000 and Rs 22,000 a tonne each.

Stressing on the need to bring in reasonable price parity between urea and P and K fertilisers, Vellayan said: “By increasing the urea price, the savings in subsidy may be disbursed to P&K fertilisers for proportionate increase in subsidy of these complexes whenever required – like in case of global price rise or depreciation of rupee”.

Urea prices should be gradually increased over the next two years.

A 70 per cent rise in prices would help the Government save annual subsidy of up to Rs 15,000 crore, he said.

“We feel urea has to be brought under the nutrient-based subsidy (NBS) scheme,” said H.S.Bawa, Executive Vice- Chairman of Zuari Industries Ltd. Satish Chander, Director-General of FAI, said overall fertiliser consumption was down by 12 per cent in April-August period due to poor monsoon.

Urea offtake fell 4 per cent, while DAP sales declined 29 per cent, he said.


(This article was published on September 20, 2012)
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