The Centre on Friday directed manufacturers of fertilisers to withhold any proposed hike in prices for nutrients, including complex fertilisers. It also kept the nutrient-based subsidy (NBS) scheme unchanged for potassic and phosphatic fertilisers for 2021-22, till further orders.

Mansukh Mandaviya, Union Minister of State for Chemical and Fertilisers, announced the Centre’s decision stating that the companies have been asked to charge old rates for decontrolled fertilisers.

“A high-level meeting was convened to assess the situation arising after fertiliser price hike and availability issues cropped up in the country. The Centre has directed fertiliser manufacturers not to hike fertilizer prices,” Mandaviya said in a statement.

Mandavia further stated that the companies have agreed to the government’s directive and that the farmers will continue to get the complex fertilisers, including DAP/MOP/NPK, at the old rates.

Fertiliser makers, including the largest player Indian Farmers Fertilisers Cooperative Ltd (IFFCO), on Thursday announced a steep price hike for key agri inputs di-ammonium phosphate (DAP) and other phosphatic fertilisers citing higher prices raw materials in the international markets. Prices of potash, DAP, phosphoric acid among others have seen a significant increase in the past few months, forcing the fertiliser makers to hike the prices of the de-controlled nutrients.

IFFCO had clarified that it will sell 11.26 lakh tonnes of complex fertilisers with old rates to the farmers.

Sources in the fertiliser industry said the government has been assured that all old stocks will be sold at the old price, but felt that the roll-over of the subsidy rates under NBS from last year would exert pressure on end-product prices as raw material cost have increased amidst a weakened rupee. For last financial year, the government had fixed the subsidy rate for nitrogen (N) at ₹18.78 per kg, phosphate (P) at ₹14.88 per kg, potash (K) at ₹10.11 per kg and sulphur (S) at ₹2.37 per kg.

Sources also felt that the steep increase of 40-50 per cent in retail prices may hurt consumption. Overall fertiliser volumes had registered eight per cent growth during 2020-21 at over 66.4 million tonnes (mt) from 61.5 mt the previous year. Urea volumes were up five per cent at 35 mt during 2020-21 against 33.5 mt the previous year. DAP volumes were up 2 per cent during the fiscal, while NPKS saw a growth of 17 per cent and muriate of potash (MoP) was up 19 per cent.