March 28, 2012
India may allow companies to remove imported fertilisers from port
As the demand is seen to rise from next month, the Indian government is likely to allow fertiliser firms to lift from April 1 around one million tonnes of imported soil nutrients, especially potash and DAP, lying at ports.
Last month, the Fertiliser Ministry had issued an order stopping fertiliser companies from lifting fertilisers that were imported in February and March.
"The Ministry has decided to permit fertiliser companies to lift imported stock of February and March lying at ports from April 1. An official order in this regard will soon be issued," a source said.
About one million tonnes of fertiliser imported during the February and March period is lying at ports. The decision has been taken in view of expected rise in fertiliser demand from April onwards ahead of kharif (summer) sowing, the source said.
The Ministry had banned movement of fertilisers to curb some companies from taking any undue advantage of high subsidy in the current fiscal year.
With the government deciding to lower subsidy on these soil nutrients for the next fiscal year, sources pointed out that fertiliser firms had intended to claim subsidy on the 10 lakh tonnes of imported quantity in the current year itself even as there was a poor demand of fertiliser.
The Ministry disburses subsidy to fertiliser companies on actual-sale - receipt basis. Major importers are IFFCO, PPL, Chambal Fertilisers and Indian Potash Ltd.
The government is giving a subsidy of INR19,763 (US$388) per tonne on DAP and INR16,054 (US$315) a tonne on MoP in this fiscal year. However, it has decided to slash the subsidy on DAP and MoP to INR15,000 (US$295) per tonne each in view of bearish global prices.
The subsidy bill on non-urea fertilisers is expected to increase to about INR70,500 crore (US$3.4 billion) this fiscal year from about INR61,100 crore (US$12 billion) a year earlier.
After the decontrol of non-urea fertilisers, DAP and MoP prices have more than doubled to INR20,000 (US$393) a tonne and INR12,000 (US$236) a tonne, respectively.
India imports almost half of its requirement of DAP and almost entire requirement of MoP.