Rising DAP, potash prices dampen kharif yield prospects

By FE Bureau4 days ago

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Prices of phosphatic and potassic fertilisers are determined by the market as subsidies provided by the government are minimal and fixed. These fertilisers are mostly imported.

Indias fertiliser consumption in FY20 was about 61 million tonne of which 55% was urea and is estimated to have increased by 5 million tonne in FY21. Since non-urea (MoP, DAP, complex) varieties cost higher, many farmers prefer to use more urea than actually needed.

As prices of diammonium phosphate (DAP) and complex fertilisers have surged in the intentional market in recent months, domestic fertiliser companies have hiked prices for the upcoming kharif season steeply, in a move that could reduce crop yield as farmers resort to excessive use of subsidised fertiliser urea instead.

Prices of phosphatic and potassic fertilisers are determined by the market as subsidies provided by the government are minimal and fixed. These fertilisers are mostly imported.

Fertiliser cooperative IFFCO hiked prices of DAP and complex fertilisers by 46-58% for supplies from new global contracts for inputs, compared to the rabi season. It has, however, said that about 11.26 lakh tonne of complex fertilisers would still be sold at old rates since these were manufactured prior to the hike in global prices of the key raw material.

We at IFFCO will ensure that there is enough material in the market with old rates and I have instructed the marketing team to sell only previously packed material with old rates to farmers. We always take decision by keeping a farmer-first approach, IFFCOs managing director US Awasthi said in a statement on Thursday.

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