In a virtual clampdown on imports, the Government has stopped issuing fertiliser movement control orders on all imported di-ammonium phosphate (DAP) and NPK complex nutrients from this month.
The move has been triggered by the huge unsold stocks of fertilisers lying both with companies and the distribution chain, following the recourse to large-scale imports undertaken this fiscal and poor offtake from farmers.
While the Government has freed the maximum retail prices chargeable by companies for all non-urea fertilisers, it, however, still regulates how much material is to be sold in different States. Accordingly, it also decides which company would sell how much quantity. These, in turn, are regulated under the Fertiliser (Movement Control) Order issued every month.
Without obtaining an order, a company cannot avail of the Government’s subsidy concession on the material that has been despatched by it. The order, moreover, is applicable on both fertilisers manufactured by the company and imported by it.
“For this month, orders have been issued only for the DAP and complexes being manufactured by the companies. No order is being issued for any new material that is being imported. The imported material can only be kept in the ports and since no subsidy will be paid without a movement control order, nobody will import,” an industry source told Business Line.
According to him, the Department of Fertiliser has told all companies verbally that it will not issue any movement control orders, without giving in writing though.
During April 2012 to January 2013, fertiliser makers have imported about 58 lakh tonnes (lt) of DAP and another 4 lt of complexes containing nitrogen, phosphorous, potash and sulphur in various proportions.
Indian Potash Ltd has been the single largest importer at 14.44 lt (all DAP), while the erstwhile KK Birla Group companies – Chambal Fertilisers, Zuari Industries and Paradeep Phosphates – together have brought in 15.5 lt of DAP and 1.04 lt of complexes.
The other major importers include Nagarjuna Fertilisers and Chemicals (3.60 lt DAP and 1.84 lt complexes), Mosaic India (4.14 lt DAP), Tata Chemicals (3.23 lt DAP), Gujarat State Fertilisers and Chemicals (3.07 lt DAP), Coromandel International (2.05 lt DAP), Krishak Bharat Co-operative (1.96 lt), the SPIC Group-controlled Greenstar Fertilisers (1.78 lt DAP and 18,700 tonnes complexes), Indo Gulf Fertilisers (1.78 lt DAP), and Indian Farmers Fertiliser Cooperative (1.73 lt DAP).
Besides these, DCM Shriram Consolidated (80,000 tonnes DAP), Deepak Fertilisers (41,000 tonnes DAP) and KPR Fertilisers (35,000 tonnes DAP) have imported small quantities.
“With some 55 lt opening stocks of DAP and complexes likely on April 1, there is enough material to take care of the coming kharif season requirements. The Government does not want to incur unnecessary additional subsidy burden from fresh imported material. That is probably why they are discouraging imports now,” the source said.
The current unprecedented stock build-up has been due to the erratic monsoon rains that led to poor offtake by farmers. Besides, the prices of de-controlled non-urea prices shot up massively following the Government’s move to cut the nutrient-based subsidy rates on these.
Since Rabi 2011, retail prices of DAP have increased by almost a third, from about Rs 18,200 to Rs 24,000 a tonne, while similarly going up from Rs 12,000 to Rs 17,000 a tonne for MoP. The farm gate prices of single super phosphate has also soared from Rs 4,800 to Rs 7,800 and that of 10:26:26, a popular complex fertiliser, from Rs 16,000 to Rs 22,000 a tonne.