Public sector fertiliser company FACT has decided not to hike fertiliser prices for the time being, despite the surge in raw material prices including that of natural gas.

“The Fertiliser Ministry is in the process of announcing subsidies to fertiliser manufacturing companies to tide over the crisis and we hope that this will be through during April”, Kishor Rungta, Chairman and Managing Director of FACT told BusinessLine.

Ruling out reports of non-availability of fertiliser in the State, he said “right now, there is no panic situation and there is availability of enough stocks. The government is taking all precautions to ensure adequate quantities of fertiliser to farmers”. 

The increase in raw material prices and natural gas has forced fertiliser manufacturing companies to hike the prices of their products and many companies have already hiked prices. The Russia-Ukraine conflict had also made things worse, leading to a shortage in the fertiliser availability across the world.

FACT, which is sourcing LNG as feedstock for fertiliser production, is not wary of the current rise in gas prices. The public sector fertiliser company has taken up the matter with IndianOil-GAIL-BPCL combine that supplies the gas to extend the contract for one more year for receiving the gas at the current offered rates, Rungta said, adding that FACT is getting gas at a very competitive price.

Aiming at 20 per cent growth

Bullish over the demand for fertiliser in the country, the CMD said the company is looking at 20 per cent growth in 2022-23 with a target of ₹5,000 crore turnover. In FY 22, FACT has registered a record highest ever turnover of ₹4,100 crore.

Despite restrictions due to the pandemic, the company had performed well in 2021-22. It produced 9.63 lakh tonnes of fertiliser during the year despite the adverse market scenario due to the sky-rocketing of raw material prices in the international markets.

“The total fertiliser sales for the year crossed 10 lakh tonnes,” he said.

Another highlight during the year is the restart of caprolactam production after about 9 years. The company produced 20,835 tonnes of caprolactam resulting in a considerable reduction in its imports. .

Spike in intermediary prices

FACT is also planning to increase its production capacity with an additional NP fertiliser plant at its Cochin Division located at Ambalamedu. The work for the new project has already started and is expected to be completed by 2024. This will add another 5 lakh tonnes to the total production capacity of the company, he said. 

MP Sukumaran Nair, Director of the Kochi-based Centre for Green Technology & Management said India will have to face an increase in the import price of intermediates such as ammonia and other fertiliser products on account of the disruption of fertiliser trade around the Baltic region.

In the scenario of global gas prices going up leading to an increase in ammonia price, the fertiliser situation raises concern with regard to its economics of production and availability.

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