The Centre has extended the tenure of Indian Potash Limited (IPL) as a canalising agency for import of urea by a year until March 31, 2024. Incidentally, the notification, issued on March 22, came on the same day the government made it clear that the availability would be more than demand in kharif due to higher stock position and as a result the country will not need to import for the next season.

Government fertilizer companies RCF and NFL are two other canalising agencies that import urea on government account.

Sources said that last year IPL had imported over 40 lakh tonnes (lt) of urea while in this fiscal imports have dropped to 22 lt. A recent tender in which 11 lt were contracted by IPL at $330-335/tonne will be delivered next fiscal, the sources said. Imported urea (c.i.f. Mumbai), which used to be $280-290/tonne until January 2021, flared up two years ago and reached a peak of $990 in December 2021.

Govt decision impact

However, global prices started softening up from January 2022 and reached $500 in January 2023. Experts said global prices might further drop after India announced its decision not to import for kharif requirement.

Chemicals and Fertilizers Minister Mansukh Mandaviya on Wednesday said there would be no shortage of fertilizers in the upcoming kharif sowing season as the domestic production and stocks-in-hand, together estimated at 194.3 lt, will be sufficient to meet the local demand of about 179 lt.

During the April-January period of the current fiscal, urea import jumped 1.4 per cent to 73.1 lt and sales increased by 7.3 per cent to 318.5 lt. There was low opening stock last year. Officials said the main reason for controlling the imports despite higher demand was increase in domestic production as well as additional use of nano urea.

The domestic production of urea in April-January surged 12.8 per cent to 237.2 lt, officials data show. The estimated opening stock as on April 1 this year will be 55 lt while domestic production is pegged at 139.3 lt for the next six months.

Urea import is always a concern as it has a lion’s share in the total fertilizer subsidy. The urea subsidy has already reached ₹1,42,332 crore as on January 31 in the current fiscal, which is 69 per cent of ₹2,07,450 crore released for all fertilizers. To make urea available to farmers at ₹266/bag of 45 kg, the government bears about ₹3,000/bag in the form of subsidy.

Related Topics
comment COMMENT NOW