Page 174 - CW E-Magazine (17-10-2023)

Special Report Special Report

Fertiliser scenario during 2022-23 of MOP declined considerably due to has persisted for about two decades of the country helped in sowing of
high international prices.
without recognition.
kharif crops. Total area sown under the
kharif crops was 105.4-million hectares
ndia’s gross domestic product during the period. Rainfall during the ARVIND CHAUDHARY Consumption of fertilisers Furthermore, though the government as on 25th August, 2023 compared to
(GDP) grew by 7.2% during 2022-23 post-monsoon season in 2022 was 19% Consumption of total fertiliser nu- has acknowledged improvements in 105.0-million hectares on the same date
Iand 7.8% during the April-June higher than the LPA. Water storage Director General trients, estimated at 29.84-mt during energy effi ciency under the NPS of previous year. Skewed distribution
Fertiliser Association of India
quarter of current fi scal (2023-2024). position in major reservoirs was Email: dg@faidelhi.org 2022-23, registered a marginal growth policy, the fi xed costs associated with of rains (excess and defi cient rains in
The economy is expected to grow at comfortable in 2022. of 0.2% over 2021-22. Consumption of investments made in energy improve- different areas) and huge defi ciency in
6.5% in the current fi scal notwithstand- suffered due to lack of availability of N and P O registered increase of 4% ment projects have not been incorpora- the month of August in northern States
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ing defi cient monsoon rains. There has As a result of the normal monsoon, suffi cient quantity of imported raw and 1.2%, respectively, over 2021-22. ted into the overall fi xed cost structure. has affected kharif crops.
been 4% and 3.5% growth in the agri- comfortable water and fertiliser avail- materials/intermediates and their high However, consumption of K O wit- There is an urgent need for comprehen-
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culture sector in 2022-23 and April- ability, and sown area, production of costs. nessed a sharp decline of 32.2%. sive update of all aspects of fi xed costs Domestic production of urea, DAP
June quarter of 2023-24, respectively. food grains touched a record level of to ensure viability of existing urea and NP/NPK complex fertilisers in-
Fertiliser sector also showed positive 330.5-mt in 2022-23, representing a Natural gas use in fertiliser manu- India is dependent on imports to production units. We are hopeful for creased during April-July 2023 over
growth. Use of fertiliser is indispens- growth of 4.7% over 2021-22. Produc- facture a great extent to meet its fertiliser de- early resolution of the issue. April-July 2022. Growth in produc-
able for development of agriculture. tion of oilseeds, sugarcane and cotton Natural gas is an essential input – mand, either through import of fi ni- tion of urea was due to higher contri-
are also estimated to have increased both as feed and fuel – for production shed products or raw materials. The Regarding production of urea be- bution of new plants, compared to the
2022 monsoon & its impacts during the year. Production of horti- of nitrogen-containing fertilisers. The international market for these are quite yond reassessed capacity, removal of same period of the last year. There has
The Southwest monsoon is impor- cultural crops also touched to a record natural gas from new fi ndings is auc- volatile, and prices depend on demand- ceiling for reimbursement of variable been increase in production of DAP
tant for Indian agriculture as 50% area level of 350.9-mt in 2022-23. tioned and given to the highest bidder. supply positions and geopolitical situ- cost plus minimum fi xed cost in view of and NP/NPKs due to considerable de-
is still rainfed. 2022-23 was the fourth The share of supply of domestic gas to ations. This happened in 2022-23 also sudden decrease in prices of imported cline in prices of raw materials in the
successive Southwest monsoon year Production of fertilisers in 2022-23 fertiliser plants has dwindled gradu- when the industry procured fi nished urea and gas prices staying high will international market. However, pro-
when the country witnessed a normal Three new urea plants of HURL ally over the years. The domestic gas products and raw materials used for enable the urea producers in planning duction of SSP showed a decline dur-
rainfall. The Southwest monsoon contributed about 1.2-mt to the urea share in fertiliser production declined production of fertilisers at exorbitantly of production schedule. ing the period. Import of urea and NP/
2022 set in over Kerala on 29th May, production of 28.5-mt, thereby resulting from 17.7% in 2021-22 to 15.7% in high prices. NPKs reduced, whereas DAP and MOP
2022 against normal date of 1st June, in a growth of 13.6% in urea production 2022-23. The Government of India has Reforms in import tariffs increased during April-July 2023 over
but covered the entire country by 2nd in 2022-23 over 2021-22. Production of established a pool account for supply Despite the high prices of fertilisers The basic economic principle of April-July 2022.
July, 2022. The cumulative rainfall phosphate (P O ) also showed healthy of natural gas to urea sector. The cost and raw materials in the international keeping import duty on inputs lower
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during the season was 6% above the increase by 6.3% during the year. Pro- of pooled gas has been going up due to market, Government of India and the than fi nished products has been de- There has been comfortable avail-
Long Period Average (LPA). However, duction of urea could have been more, increase in share of imported liquefi ed fertiliser industry spared no efforts in fi ed in the phosphatic sector as Cus- ability of fertilisers from both domes-
there had been very uneven inter-month but some plants suffered due to equip- natural gas (LNG), which is usually arranging supplies of fertilisers in every toms Duty on input and output is same. tic and imports for use by the farmers.
variations in the distribution of rainfall. ment and maintenance related problems more expensive than domestic gas. nook and corner of the country for use Higher GST on ammonia and sulphuric The sale of urea, DAP and NP/NPKs
Out of 36 meteorological sub-divisions, and constraints in availability of work- by the farmers. In 2022-23 also, Govern- acid has given further blow to domes- increased during the period, while the
30 received normal to excess rains and ing capital. Production of P O could GAIL, as pool operator, should be ment of India came to the rescue of tic production of P&K fertilisers. The sales of MOP and SSP showed de-
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remaining six received defi cient rains also have been more, but some plants mandated to maximise the supply of the farmers and increased subsidy on long-pending issues on GST inter-alia clines. Retail price of MOP continues
domestic gas to the fertiliser sector. fertilisers so that farmers remain un- include non-refund of accumulated in- to be disproportionately higher than
This will help to reduce the cost of affected from the skyrocketing prices put tax credit (ITC) due to subsidy under other products, affecting its sales.
domestic urea and eventually the outgo of fertilisers. inverted duty structure, non-refund of
from public exchequer on account of ITC due to services, etc., are under the It is hoped that normal South-
subsidy. Policy issues for urea units consideration of the Government. Ferti- west monsoon rains in September will
The policy for minimum fi xed cost liser industry welcomes the steps of the leave good moisture contents in the
Imports of fertilisers and updation of fi xed costs for urea Government on continuation of ongoing soil for the ensuing rabi crop season.
About 30% of the total requirement units remained under consideration of urea subsidy scheme up to 31st March, Water availability in the reservoirs at
of fi nished fertiliser products is fulfi lled the Government. A separate committee 2025 at a total estimated outlay of the end of kharif season is also likely
through imports. During 2022-23, there in the Department of Fertilisers (DoF) Rs. 3,68766.70-crore for the fi nancial years to be comfortable. Overall growth in
had been increase in import of DAP has been constituted to review the fi xed 2022-23 to 2024-25 and also recent initi- consumption of fertilisers in the entire
and NP/NPK complex fertilisers and cost issues and the same has been car- atives for better nutrient management. year of 2023- 24 is expected to register
decline in import of urea and MOP. rying various exercises. There has been an increase over the previous year.
Due to increase in domestic production a considerable escalation in fi xed cost Early trends for current year
mainly from the new plants, import of elements over the benchmark year of In the current year, suffi cient rains [Indian Journal of Fertilisers, 19(9),
urea declined during 2022-23. Import 2002-03 for the NPS-III policy, which in July and early August in most parts 830-831, September 2023]

174 Chemical Weekly October 17, 2023 Chemical Weekly October 17, 2023 175

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