India’s dependency on fertilizer 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 percent, 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 percent 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, fertilizer companies are increasingly focusing on customized NPK fertilizers (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 realizations and profitability on these customized products, it said.
The country consumes 55 million tonnes of fertilizers annually, of which 72 percent is domestically produced while the rest is imported, India Ratings and Research (Ind-Ra) said in a report. Of the 15.5 million tonnes of fertilizers imported, urea, DAP, and MOP constituted 6 million tonnes (39 percent), 4.3 million tonnes (28 percent) and 4.7 million tonnes (31 percent), respectively, during FY18.
Source ; PTI
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