The import of urea dropped by 25 per cent in the first half of the current fiscal while its domestic production increased by 17 per cent. However, the benefit of the fall has been negated by the increased import of di-ammonium phosphate (DAP) and complex fertilisers, which along with high global prices have resulted in the subsidy level reaching nearly 80 per cent of the Budget allocation.

According to the latest official data, the import of urea in April-September dropped 24.7 per cent to 29.91 lakh tonne (lt) from 39.7 lt a year ago. But imports of all other fertilisers increased – complex by 121.5 per cent to 15.26 lt, DAP 43.3 per cent to 33.25 lt and muriate of potash (MOP) by 4.9 per cent to 8.83 lt. Overall, the import of all fertilisers increased by 11.6 per cent to 87.25 lt. The complex variety is a combination of nitrogen (N), phosphorous (P), potash (K) and sulphur (S) nutrients.

NPK sales drop

“It is natural to see a drop in import after domestic production goes up in urea. But it is a concern when the import of complex has more than doubled. In absolute terms, it is more than half the volume of imported urea,” an industry expert said, adding the sales of NPK have dropped almost by a fifth.

The main reason for the drop in import, controlled by the government, is due to higher production which reached 139.32 lt on September 30 in the current fiscal compared with 119.19 lt a year ago. Though global prices, though, softened to $600/tonne in August from $990 in December 2021, they are still high as they were below $300 till January 2021.

The government on October 19 announced the commencement of production from the 12.7 lt capacity revived urea plant in Barauni (Bihar), which takes the annual installed capacity to 309 lt in the country.

Skewed sales

Meanwhile, the urea subsidy was ₹55,198.18 crore in the first half, which is 87.3 per cent of the Budget Estimate (BE) of ₹63,222.32 crore and the subsidy on DAP and MOP fertilisers exceeded ₹27,000 crore, which is 64.3 per cent of ₹42,000 crore BE. The total fertiliser subsidy in April-September was ₹82,204.74 crore or 78.1 per cent of ₹1,05,222.32 crore BE 2022-23.

On the skewed sales of fertilisers, agriculture experts said the usage of more urea and DAP at the cost of complex and potash is not good for crops and there should be a balanced use of fertiliser. “The cost is definitely a factor as farmers are getting urea and DAP at cheaper rates compared to complex and MOP. The subsidy policy needs to be tweaked accordingly if balanced use of fertiliser is to be achieved,” said S K Singh, an agriculture scientist.

While the DAP is sold around ₹1,350/bag (of 50 kg), the MOP is ₹1,700-1,750 per bag and the complex is sold at about ₹1,500/bag. Urea is selling price at ₹267/bag. Its price has not been changed for more than a decade.

The sales of urea have increased 4 per cent to 172.11 lt and those of DAP 23 per cent to 51.48 lt. But MOP declined by half to 7.08 lt and complex by 17 per cent to 51.97 lt.

While launching the single “Bharat” brand under “one nation one fertiliser” scheme, Prime Minister Narendra Modi said on Monday that the step would help cut the unnecessary use of fertiliser. But experts warned that unless prices are rationalised, the balanced use of fertiliser will not be achieved.

Published on October 20, 2022