Government approves import of 1.6 million tonnes of urea

The Fertiliser Ministry has accredited import of about 1.6 million tonnes (mt) of urea, approximated to price $1.five billion (virtually ₹11,five hundred crore) and it would be shipped in by Indian Potash Ltd (IPL) on federal government account to support make improvements to domestic provides.

Of the whole import, about 1 mt will arrive at ports on the West Coast although .6 mt will be on the East Coast, a Fertiliser Ministry official mentioned. As numerous as 15 organizations have signed contract for the urea source just after the government’s acceptance, the official mentioned.

The utmost quantity of .9 mt has been contracted at $981.sixty four/tonne, although yet another .6 mt will appear at $998.five, sources mentioned, introducing a small quantity of much less than a lakh tonne would be imported at about $960/tonne (all price and freight basis).

Canalising agencies

On November three, although notifying IPL and National Fertiliser Ltd (NFL) as canalising agencies for import of urea on behalf of federal government, the federal government has also eradicated community sector MMTC and STC. Rashtriya Substances and Fertilizers (RCF) carries on to be a canalising agency. Due to the fact the utmost retail price of urea is set and the federal government bears the total subsidy, the import is controlled to assure selling prices are not inflated.

When India generates 24-twenty five mt of urea, about 9-ten mt are imported per year to meet up with the demand from customers. The need of urea is assessed by the federal government and imports are allowed periodically based mostly on demand from customers, source and selling prices. India was claimed to have imported about one particular mt of urea from China all through April-July this year, before the neighbouring region banned export thanks to a domestic lack. Now, Russia and Egypt are the main sources.

IPL, which opted out to be a canalising agency in 2018 and has been forced by the federal government this time, has been prosperous in cutting down the import selling prices and secured the arrangement from exporters to provide at Indian ports by December 31. “It is a wonderful achievement to finalise the contracts in a several days that way too when numerous nations are struggling to get urea just after China, Russia and Egypt limited/tightened their provides,” an marketplace official mentioned.

Even as some organizations signed contracts at $1,000/tonne absolutely free-on-board (FoB) to source from Egypt, the participation of Russia’s biggest producer Eurochem in the IPL tender aided in reducing the selling prices, sources mentioned.

Urea has a share of 55 for each cent in the country’s all round fertiliser usage, approximated at about sixty one mt in 2019-twenty. As non-urea (MoP, DAP and advanced) kinds price bigger, farmers want to use additional urea than actually required. The utmost retail price (MRP) of a forty five-kg bag of urea is ₹242 and that of a fifty-kg bag is ₹268, all selling prices exclusive of fees to neem coating and taxes as applicable, towards ₹1,200 for a fifty-kg bag of DAP.

The Centre has not adjusted the MRP of urea because 2012, when it was greater by ₹50/tonne to ₹5,360.

Supply-demand from customers

In accordance to Fertiliser Ministry facts, the need of urea all through April-September for the kharif sowing year was seventeen.seventy five mt, whereas the availability was twenty.82 mt and gross sales ended up to the tune of sixteen.fifty six mt. For the on-likely rabi sowing, demand from customers has been pegged at seventeen.9 mt for total year, whereas the availability was five.44 mt as on November 24, although 4.forty one mt of urea has already been marketed because October 1. This leaves about eight mt of urea to be built accessible to the farmers in the remaining period of time.