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Resource centre on India's rural distress
 
 

Import price of phosphatic & potash fertilisers raised


The government on Thursday raised the benchmark prices at which fertiliser companies and designated traders can import phosphatic and potash fertilisers with subsidy support so that farmers have uninterrupted supply of plant nutrients in the coming monsoon season despite higher global prices. The subsidy given to companies for making the commodity available to farmers, is computed based on the notified benchmark prices.

The decision to raise the prices of imported di-ammonium phosphate (DAP) and muriate of potash (MoP) fertilisers was taken at a meeting of the Cabinet Committee on Economic Affairs (CCEA) here.

The government has also allowed fertiliser companies to raise retail prices of DAP by up to R600 per tonne from the existing rate of R10,750 per tonne.

The benchmark prices have been raised to $612 a tonne for DAP and $420 a tonne for MoP from the current level of $ 580 a tonne and $ 390 a tonne, respectively. However, global producers are asking for over $500 a tonne for MoP, which Indian importers have rejected. Importers have taken the view that they would buy this season only if producers sell MoP at $420 a tonne, the rate at which China procured the commodity.

India imports six million tonnes of DAP and four million tonnes of MoP every year. "This (revision in benchmark prices) will enable the manufacturers and importers to import fertiliser and inputs and undertake domestic production and make fertiliser available to the farmers in 2011-12," an official statement said, adding that farmers would be able to buy fertilisers at subsidised rates.

The budgetary provision for phosphatic and potassic fertilisers for the 2011-12 fiscal is R33,500 crore. However, the total subsidy outgo on potassium and phosphatic fertilisers for the ongoing fiscal will depend on the overall sale of the fertilisers, the statement added.