Calibrated import and lower global price of urea has helped the government to contain fertilizer subsidy till now at 66 per cent of the Budget Allocation for the current fiscal.

In contrast, there is a three per cent jump in urea imports. If the current situation continues, urea subsidy may be within the estimated ₹1.31-lakh crore budgeted for 2023-24.

Between April and November, urea subsidy has reached ₹86,987.47 crore, while that of potash and phosphorus has reached at ₹49,004.12 crore, which is 111.4 per cent of ₹44,000 crore allocated in the Budget. However, the government has already provided ₹13,500 crore additional subsidy in the supplementary demand of grants over and above the Budgetary allocation of ₹1.75-lakh crore for all the fertilisers.

As farmers rushed to stock urea in the Rabi sowing season due to a shortage they faced in 2022, sales of the nitrogen fertiliser in October 2023 increased by 15 per cent from a year ago. But in November, sales registered a 19 per cent drop.

3.3% rise in urea offtake

Overall consumption of urea during April-November recorded a modest 3.3 per cent rise to 239.69 lakh tonnes (lt) from 232.03 lt year-ago, whereas sales of all fertilizers put together jumped 6.6 per cent to 427.13 lt from 400.69 lt.

“Farmers were expecting a shortage, so they purchased in advance in October. But, as water availability is a major issue this season in States such as Karnataka, Maharashtra and Madhya Pradesh, the application of fertilisers also got reduced which could have brought down the sales,” said SK Singh, an agriculture scientist. He pointed out that not only sales of urea fell in November, all key fertilisers’ sales declined — DAP was down by 30 per cent , MoP by 27 per cent and complex 10 per cent.

The total sales of di-ammonium phosphate (DAP) surged 8.5 per cent to 90.53 lt during April-November from 83.41 lt a year ago, muriate of potash (MOP) dropped by 0.9 per cent to 11.08 lt from 11.18 lt and complex increased by 15.9 per cent to 85.83 lt from 74.07 lt year-ago.

Complex fertiliser is a combination of nitrogen (N), phosphorous (P), potash (K) and sulphur (S) nutrients.

Overall use drops

The import of urea, controlled by the government, was recorded at 47.65 lt during eight months to November against 46.11 lt year-ago. There was record import of urea at 98.28 lt during the 2020-21 fiscal.

But import of overall fertilisers dropped 1.6 per cent to 1127.98 lt during April-November from 130.04 lt a year ago, in which complex import declined 13.9 per cent to 16.72 lt from 19.43 lt and DAP by 12.9 per cent to 45.98 lt from 52.81 lt. But, MOP import surged 50.8 per cent to 17.63 lt from 11.69 lt.

The production of all fertilisers was up by 6.3 per cent to 340.94 lt from 320.69 lt, which included urea at 208.82 lt (against 187.21 lt year-ago), DAP 30.5 lt (27.4 lt), Complex 64.52 lt (62.21 lt), SSP 33 lt (38.87 lt) and Ammonium Sulphate 4.1 lt (5 lt).

The imported urea cost (FOB, Gulf) declined 34.53 per cent to $402/tonne in November from $614 a year ago, while DAP dipped to $595/tonne (CFR) from $743, MoP fell to $319/tonne from $590 and rock phosphate to $216/tonne from $305.