ICRA expects rich fertilisers demand

PTI New Delhi | Updated on February 21, 2011 Published on February 21, 2011

Credit rating agency, ICRA, on Monday said it expects healthy growth in demand for fertilisers, especially phosphatic and other complex fertilisers, due to promotion of a more balanced nutrient consumption with the new nutrient—based subsidy (NBS) policy of the Union government.

ICRA, an associate of Moody’s investor service, expects major policy changes for urea such as the new urea investment policy, modification of the new pricing scheme subsidy policy or adoption of NBS in the near term, it said in a statement.

“Subject to regulatory clarity, ICRA expects the near—to—medium term outlook for the existing operations of cost efficient urea manufacturers in India to remain stable,” it said.

The NBS policy of the Union government is effective from April 1, 2010.

It said the existing urea policy has failed to encourage investments in brownfield and greenfield projects because several issues, including rising gas prices, have not been fully addressed.

The Indian fertiliser industry has registered a modest demand growth at a compounded annual growth rate (CAGR) of 5.02 per cent over the last five year period from financial year 2004—2009.

The modest demand growth along with stagnant domestic production led to a sharp increase in imports reflecting a CAGR of 28.53 per cent during the period.

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Published on February 21, 2011
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