Analysis The country`s fertiliser production is pegged at 36.87 million tons in the 2012-13 fiscal, up over eight per cent from last fiscal.
`“We have kept a production target of 3,68,75,300 tons of fertilizer for this financial year, which is slightly higher than 3,41,09,700 tons in last fiscal,`` a senior Fertilizer Ministry official said.
Of this, fertiliser companies will produce 18.14 mt of soil nutrients during the kharif (summer) season and the rest 18.73 mt in the rabi (winter) period of 2012-13, the official said.
While urea production is estimated at the previous year’s level of 22.57 mt, that of complexes and di-ammonium phosphate (DAP) has been pegged higher at 9.98 mt and 4.31 mt, respectively, this year.
Last fiscal, the production of complexes and DAP was estimated at 7.82 mt and 3.71 mt each. Domestic demand for urea is 27-28 mt and the shortage of 6-7 mt will be met through imports.
Similarly, the gap in availability of DAP and potash will be filled by imports. The country imports half of its requirement of DAP and almost entire requirement of potash
NEW
DELHI:
The fertiliser ministry is mooting a proposal to raise urea prices by 10%. With
this proposed revision, which will have to be endorsed by the Cabinet Committee on Economic Affairs, urea
prices will go up from Rs 5,310 per tonne to Rs 5,841
per tonne.
This will help the government to
reduce its annual subsidy burden by around Rs 2,000 crore. At present , the
annual urea subsidy bill is in excess of Rs 20,000 crore. "The proposal is
doing rounds in the ministry for quite some time. It can be implemented only
after getting stamped by CCEA," said a senior fertiliser ministry official.
In the last 10 years, the
government raised urea prices only once in 2010 by 10% from Rs 4,830 per tonne
to Rs 5,310 per tonne. With this, the government saved around Rs 1,200 crore on
urea subsidy.
However, the Expenditure Reforms
Commission, set up by the government in the year 2000 to work out a road map
towards a subsidy-free regime, had recommended an annual price increment of 7%
for some time before decontrolling the industry. At Rs 5,310 per tonne, urea is
the cheapest fertiliser available.
"Two months ago, the
government had cut the subsidy on phosphate and potashbased fertilisers by up
to 30%. Now subsidy cut on urea is likely to bring down its indiscriminate
use," said the official. This move is in line with Finance Minister Pranab
Mukherjee's intent of bringing down central subsidies to 1.75% during the next
3 years.
In his budget speech, he had
announced that the government would reduce the outgo on major subsidies
including food, oil and fertilisers to Rs 1.79 lakh crore from Rs 2.08 lakh
crore estimated in the last fiscal. The industry, however, feels that a 10%
increment in prices is not enough.
"The prices of urea need to
be revised. Though it won't have any major impact on fertilizer companies, it's
a small step towards promoting balanced fertiliser use. Due to a major gap
between NPK fertilizer prices and urea prices, the latter is being excessively
used, taking a huge toll on the soil.
There's still scope of quick
revisions," said Satish Chander, director general of Fertilizer Association of India (FAI). According to the
industry, the annual demand for urea in the country is around 28 million tonne
of which 22 million tonne is indigenously produced and the rest imported. The
cost of urea production in the country is around Rs 13,000 per tonne while the
import cost is around Rs 23,000 per tonne.
"With the government fixing
the maximum retail price at Rs 5,310 per tonne, the difference between the cost
of production or import and the MRP is being borne by the government in the
form of subsidy," said another ministry official.
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