Page 124 - CW E-Magazine (7-5-2024)

Point of View

and the cost of the urea produced. Given that the technology
is imported, and capex is high (compared to natural gas based Urea imports have fallen; but availability far
urea plants), it is near certain that manufacturing costs will be above GOI’s estimates of consumption
significantly higher. As there is a cap on the urea selling price, 45 35.7 39.6
this will pose an additional burden on the fertiliser subsidy 40 32.0 33.7 35.1 34.2
handed out from the exchequer. 35 30.3 32.9
30
25
Decline in consumption 20
According to the Ministry of Chemicals and Fertilisers urea 15 24.0 23.9 24.5 24.6 25.1 28.5 31.6
7.5
8.0
consumption in FY24 fell by 8% or about 2.8-mt from FY23 10 6.0 9.1 9.8 9.1 8.3
levels to 32.9-mt in FY24. But this does not match with produc- 5
tion estimates of about 31.6-mt in FY24 and imports of about 0 FY18 FY19 FY20 FY21 FY22 FY23 FY24
8.0-mt, which puts total domestic availability at about 39.6-mt. Production Consumption, as per GOI
In previous years the difference between domestic availability Imports Availability (Production + Imports)
and actual consumption has been marginal (see Chart).

The government has attributed the fall in its consumption estimates largely due the widening use of nano-urea (a liquid formulation
in which urea is dispersed in nanoparticle form in a carrier). This formulation was launched with much fanfare in June 2021 by the
Indian Farmers and Fertiliser Cooperative (IFFCO), which claimed a 500-ml spray bottle of nano-urea can substitute a 45-kg bag of the
conventional fertiliser. Given the paucity of independent analysis of this astounding claim – which has no precedent anywhere else in
the world – it remains to be seen how much further this shift can contribute to lowering overall urea demand. Some scientists have
already warned that indiscriminate usage of nano-urea to bolster a false sense of self-sufficiency, can have disastrous consequences
on nitrogen (N) levels in just a few years.

Raising nutrient use efficiencies
There is the larger issue of improving nitrogen use efficiency (NUE) (which is what nano-urea is claimed to do). This is the amount
of N taken up by the plant, compared to the amount available from the soil or applied. Improving NUE is particularly important for N,
considering on average the NUE in N mineral fertilisers is only 50-60%. Plain urea is reported to have NUE levels of only 50%, as 2-20%
is lost through volatilization, 15-25% reacts with organic compounds in the soil, and 2-10% is lost through leaching into water systems.

The technological interventions that can contribute to better NUE include application of foliar fertilisers directly on leaves (and not
the soil) (which is the case for nano-urea); development and use of slow- and controlled-release fertilisers (CRF) that release nutrients
over a period of time; as well as stabilised fertilisers that are associated with nitrification or urease inhibitors that delay the nitrification
of ammonia or the ammonification of urea. Neem coating, which is widely used today in India, for example, prevents the rapid break-
down of urea by preventing both hydrolysis and bacterial breakdown. The triterpenes present in the oil inhibit the activities of nitrifying
bacteria, preventing them from converting ammonia into nitrates rapidly. An alternate coating system – not yet in use in India – is
urea-formaldehyde resin, which can be produced cheaply and at scale, including by many of the fertiliser companies themselves, as
they have access to one raw material (urea) and sometimes even both.

While technology has an important role to play in improving the uptake of nutrients, the right policy, pricing and subsidy environment
will help steer investments in the right direction. The low price for N, particularly urea, has led to its excessive use, and drastically
skewed the N:P:K balance far from the ideal 4:2:1. While this has been recognised for more than a decade, rectifying the situation has
been challenging and change to the ideal ratio is glacially slow.

While curbing nutrient wastage is important and every step must be taken to prevent as much as possible, it is vital that India looks
to enhance further investments in the fertiliser industry –in urea, and, just as importantly, other complex fertilisers that supply multiple
nutrients that plants need. Existing units must be encouraged to expand, and new investments need to be encouraged. Enhancing
supply is paramount!

There is talk of self-sufficiency in urea, but that is premature and a long way off!
Ravi Raghavan

124 Chemical Weekly May 7, 2024

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