Even as the Fertiliser Association of India (FAI) has announced that there will be no further increases in the maximum retail price of nutrients on account of the rupee recent sharp depreciation, individual firms are not ruling out a hike.

The CEO of a leading private fertiliser company said that it is difficult to meet the FAI commitment for the remaining part of the ongoing rabi cropping season. “There are shipments of about 2 million tonnes (mt) of di-ammonium phosphate and one mt of muriate of potash (MOP) due between now and March-end. These are already contracted quantities, for which the prices cannot be re-negotiated and for which we will be paying at exchange rates that are higher than at the time of contract. This will obviously have to be passed on as higher MRP,” he noted.

Currently, fertiliser companies are selling DAP at an MRP of Rs 18,200 a tonne, which corresponds to a landed price of $677 a tonne and an exchange rate of Rs 49.5-to-the-dollar. For the same landed price and an exchange rate of Rs 52.15, the MRP will have to be revised upwards to Rs 20,464 a tonne, the industry official pointed out.

The same applies to MOP, where the prices have to go up from Rs 11,300 to Rs 12,550 a tonne to compensate for a weaker rupee. But on the other side, there are firms that feel they can absorb the cost till the next kharif planting season. “This is because we have already stocked up material for the current season, which was imported when the exchange rate was more favourable.

Also, we have taken forex cover against depreciation. So we will somehow be able to manage”, said an official from a South-based fertiliser company.

Last week, IFFCO Managing Direcotr, Mr U.S.Awasthi had said the company had no plans to increase prices after it secured a 5 per cent discount from some of the suppliers.

However, Uralkali the world's second largest potash supplier had ruled out a discount to importers in India.

Meanwhile, the country's largest importer Indian Potash Ltd has decided to take a staggered delivery of some of its contracts to tide over the situation. “We have decided to stagger the contracts by about two to four months,” said Mr P.S.Gahlaut, Managing Director, Indian Potash Ltd told Business Line .

Stating that the weak rupee has pushed up the import costs substantially, Mr Gahlaut said the fertiliser companies have been losing money. “Either the rupee has to go up or we should increase the prices, which we have not done for the time being,” Mr Gahlaut said.

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