After successfully checking urea imports by increasing its domestic production, the government is now said to be mulling a similar strategy for DAP which witnessed a 6 per cent rise in imports during April-January of 2023-24 fiscal. While announcing the nutrient-based subsidy for kharif 2024 season recently, the government raised the subsidy for phosphorus while keeping the financial assistance for other nutrients at same levels as they were in rabi 2023-24 season.

According to latest official data, the overall consumption of urea until January 31 in the current fiscal dropped 0.3 per cent to 317.51 lakh tonnes (lt) from 318.52 lt a year ago, whereas sales of all fertilizers put together increased by a modest 2.9 per cent to 539.79 lt from 524.64 lt. This was mainly due to higher sales of complex and di-ammonium phosphate (DAP) fertilizers.

Discouraging chemicals

The total sale of DAP increased by 5.9 per cent to 103.03 lt during April-January 2023-24 from 97.3 lt in the year-ago period, muriate of potash (MOP) was flat at 13.95 lt against 13.98 lt and complex increased by 11 per cent to 105.3 lt from 94.84 lt a year ago. Complex fertilizer is a combination of nitrogen (N), phosphorous (P), potash (K) and sulphur (S) nutrients.

Fertilizer minister Mansukh Mandaviya last week said that India’s conventional urea consumption is estimated to decline by 25 lt this fiscal on increase in demand of nano liquid urea and the government’s efforts to discourage use of chemical. The urea consumption was nearly 357 lt during FY23.

He said the consumption of conventional urea has gone down in 344 districts and sales of nano-urea have increased in 74 districts. He was hopeful that India would be self-sufficient in urea by 2025.

Industry sources said the government is now planning to make a similar push for nano-DAP (non-subsidised fertiliser) so that the consumption of phosphatic fertilizer is also reduced, without affecting crop yield. When DAP sales increase, overseas sellers also raise their prices, which the government has to bear to maintain the maximum retail price ( ₹1,350/bag of 50 kg) for the farmer, an industry official said.

Capping urea imports

He cited the recent Cabinet approval for the nutrient-based subsidy for kharif 2024 and said while the rates for all other nutrients are kept at the same levels at the rabi season 2023-24 level, the subsidy for phosphatic has been raised to ₹28.72/kg from  ₹20.82.

Import of urea, controlled by the government, was recorded at 64.33 lt during the first ten months of the ongoing fiscal against 73.07 lt a year ago, a fall of 12 per cent. There was a record import of urea at 98.28 lt during FY 2020-21.

Import of overall fertilizers also dropped by 11.2 per cent to 153.86 lt during April-January from 173.29 lt, in which complex import declined 18.5 per cent to 18.34 lt from 22.49 lt and DAP by 20.2 per cent to 50.91 lt from 63.8 lt. But, MOP import surged 45.6 per cent to 20.28 lt from 13.93 lt.

Production of all fertilizers was up by 5.9 per cent to 429.03 lt from 405.25 lt, which included urea at 265.82 lt (against 235.8 lt year-ago), DAP 37.67 lt (36.16 lt), complex 81.85 lt (79.68 lt), SSP 38.37 lt (47.4 lt) and ammonium sulphate at 5.32 lt (6.21 lt).

Meanwhile, urea subsidy has reached ₹1,11,490.47 crore while potash and phosphorus has reached at  ₹59,561.44 crore, which is 98.8 per cent of  ₹60,300 crore allocated in Budget (Revised Estimate). The government has raised the Budgetary allocation for all the fertiliser subsidy from ₹1.75 lakh crore in BE to ₹1.89 lakh crore in RE of FY24.

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