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India to continue importing fertiliser in medium-term

PTI

MUMBAI

India’s dependency on fertiliser imports will continue in the medium-term, though urea imports are likely to decline as a new manufacturing capacity comes on-stream under the New Investment Policy 2012, according to a report.

Returns from the new urea manufacturing capacity coming on-stream are likely to be strong, subject to the timely receipt of subsidy and offtake above 85 per cent, India Ratings and Research (Ind-Ra) said in a report. Ind-Ra estimates urea imports to decline to nil by FY21.

“We do not have domestic reserves of MOP and hence will continue to import 100 per cent of potash. Globally, the potash market is controlled by five companies, given their proximity to the raw material. The usage of muriate of potash (MOP) in India largely depends on the price payable by the end-user,” the report added.

Meanwhile, di-ammonium phosphate (DAP) is produced either from rock phosphate (RP) or phosphoric acid (PA) domestically or is imported directly. Given that India has limited resources of RP, with RP mines in Rajasthan being owned by Rajasthan State Mines and Minerals, most of the RP/PA is imported in the country.

Ind-Ra expects lower direct imports of DAP in the country, but higher imports of RP/PA as more conversion facilities are set up in the country, it added.

Apart from urea, DAP and MOP, fertiliser companies are increasingly focusing on customised NPK fertilisers (nitrogen-phosphorus-potassium), to address the specific agro-climatic needs of farmers.

This benefits not only the farmers but also the manufacturers, as they earn better realisations and profitability on these customised products, it said.

The country consumes 55 million tonne of fertilisers annually, of which 72 per cent is domestically produced while the rest is imported, India Ratings and Research (Ind-Ra) said in a report.

Of the 15.5 million tonne of fertilisers imported, urea, DAP and MOP constituted 6 million tonne (39 per cent), 4.3 million tonne (28 per cent) and 4.7 million tonne (31 per cent), respectively, during FY18.

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