Rollback of fertiliser worth hikes unlikely as Centre retains subsidy charges unchanged

There isn’t any change within the subsidy charges for di-ammonium phosphate (DAP), muriate of potash (MOP) and complicated fertilisers, regardless of corporations considerably climbing costs over the previous few weeks.
The Centre has determined to increase the prevailing nutrient-based subsidy (NBS) charges of 2020-21 for the present fiscal as effectively “till further orders”, mentioned an workplace memorandum from the Department of Fertilisers issued Friday. This successfully additionally guidelines out any rollback of the current worth will increase in non-urea fertilisers, even because the Union Minister of State of Chemicals & Fertilisers Mansukh Mandaviya has mentioned that corporations is not going to cost the upper costs “vartaman samay mein (for now)”
Indian Farmers Fertiliser Cooperative (Iffco) Wednesday raised its most retail worth (MRP) for DAP from Rs 24,000 to Rs 38,000 per tonne. The nation’s largest nutrient vendor additionally steeply hiked the MRPs of its advanced fertilisers with totally different nitrogen (N), phosphorous (P), potash (Ok) and sulphur (S) mixtures—from Rs 23,500 to Rs 35,500/tonne for 10:26:26, Rs 23,700 to Rs 36,000 for 12:32:16 and Rs 18,500 to Rs 27,000 for 20:20:0:13.

ExplainedA downside of urea overdoseIndian farmers apply an excessive amount of urea and too little different fertilisers. The present spike in costs of non-urea fertilisers might worsen this imbalance. The authorities ought to increase the subsidy charges on these vitamins and concurrently hike, perhaps even double, urea costs.

The unprecedented worth jumps have been inevitable for 2 causes. The first is a steep rise in worldwide costs of fertilisers in addition to uncooked supplies and intermediates. The landed price of imported DAP alone has surged from beneath $400 to round $540 per tonne since October.
The second is NBS charges that have been final fastened on April 3, 2020, at Rs 18.789/kg for N, Rs 14.888/kg for P, Rs 10.116/kg for Ok and Rs 2.374/kg for S. Based on these charges, the subsidy on DAP, which accommodates 18% N and 46% P, works out to Rs 10,231 per tonne. The subsidy on MOP (60% Ok) and 10:26:26, likewise, are Rs 6,070 and Rs 8,380 per tonne, respectively.
At $540/tonne and Rs 74.5-to-the-dollar, imported DAP prices Rs 40,230 per tonne in Indian ports. Adding 5.5% customs obligation and different expenses of Rs 3,500 (stevedoring, bagging, insurance coverage, secondary freight, storage, curiosity, promoting bills and vendor margins) takes that to virtually Rs 45,950 per tonne. Deducting the Rs 10,231 subsidy and including 5.5% items and companies tax would permit corporations to promote to farmers at Rs 37,500 per tonne on a no-profit, no-loss foundation. That is near Iffco’s new MRP of Rs 38,000/tonne for DAP.

“Companies are in no position to sell at the old rates, when the subsidy has been kept at last year’s level despite global prices of both product (DAP) and inputs (sulphur, ammonia, rock phosphate and phosphoric acid) shooting up,” mentioned G. Ravi Prasad, a fertiliser business professional.

The 50%-plus spike in MRPs of non-urea fertilisers, in keeping with him, might result in a worsening of imbalance in nutrient use by farmers. In 2020-21, retail gross sales of urea touched a report 350.42 lakh tonnes (lt). That accounted for greater than half of the 677.02 lt gross sales of all fertilisers. With the fundamental MRP of urea remaining unchanged at Rs 5,360 per tonne—it was final raised in April 2010—farmers might find yourself making use of extra of this already overused nitrogenous fertiliser.
Meanwhile, Iffco has clarified that the brand new MRPs might be relevant solely on its fertilisers moved from its crops after April 1. The outdated shares already dispatched and mendacity with retailers—estimated at 11.26 lt—will proceed to be bought on the earlier charges. The solely hope for farmers now’s the Centre saying larger NBS charges for 2021-22, perhaps after the continuing Assembly elections in West Bengal.