Calibrated imports, and lower global urea help Indian government curb fertilizer subsidy

The calibrated import of urea and reduced world market price has helped the government to maintain the fertilizer subsidy at 66% of the current fiscal budget allocation so far. On the other hand, imports of urea will increase by three percent. If the current situation continues, the urea subsidy may remain within the budgeted ₹ 1.31 lakh crore for 2023-24. Between April and November, the subsidy for urea reached ₹ 86,987.47, and the subsidy for potassium and phosphorus ₹ 49,004.12, which is 111.4 percent of the budgeted amount of ₹ 44,000 crore. However, for the additional demand for additional subsidies, the government has already provided an additional subsidy of ₹ 13,500 crore, which exceeds the budget allocation for all fertilizers by ₹ 1.75 lakh. Farmers rushed to supply urea due to lack of Rabi 2022 sowing, sales of nitrogen fertilizers increased by 15 percent in October 2023 compared to a year ago. But sales fell 19 percent in November.

Urea consumption increased by 3.3%

Total urea consumption increased modestly by 3.3% to 239.69 lakh tonnes (lt) in April-November from 232.03 lt a year ago, while total sales of fertilizer rose 6% to 427.13 liters from 400.69 liters.”Farmers expected a shortage, so they bought in advance in October. But since water availability is a major problem in states like Karnataka, Maharashtra, and Madhya Pradesh this season, the use of fertilizer has also decreased, which could have reduced sales”, said agricultural scientist SK Singh. Noted that not only were urea sales down in November, but sales of all major fertilizers were down, with DAP down 30 percent, MoP down 27 percent, and complex down 10 percent. Total sales of diammonium phosphate (DAP) in April-November increased by 8.5 percent to 90.53 liters from 83.41 liters a year ago, sales of potash (MOP) decreased by 0.9 percent to 11.08 liters from 11 liters, and complex sales up to 81.0 liters1. increased by 15.9 percent to 85.83 liters from 74.07 liters a year ago. Complex fertilizer is a combination of nitrogen (N), phosphorus (P), potassium chloride (K), and sulfur (S) nutrients.

Total use decreased

Urea under state control imported 47.65 liters in the eight months to November, compared to 46.11 liters a year ago. In the 2020-21 season, a record amount of 98.28 liters of urea was imported. However, the total import of fertilizer in April-November fell by 1.6 percent to 1127.98 liters from 130.04 liters a year ago, with complex import falling by 13.9 percent to 16.72 liters from 19.43 liters and DAP from 1214.284 liters. However, MOP imports increased by 50.8 percent from 11.69 liters to 17.63 liters. Production of all fertilizers increased by 6.3 percent to 340.94 liters from 320.69 liters which included urea 208.82 liters (compared to 187.21 liters a year ago), DAP 30.5 liters, complex 27.5 liters 64.5 liters. , SSP 33 lt (38.87 lt), and ammonium sulfate 4.1 l (5 l). Imported urea (FOB, Persian Gulf) fell 34.53 percent in November to $402/t from $614 a year ago, while DAP fell to $595/t (CFR) from $743, MoP fell to $319/t from $590 and stone. phosphate to $216/t from $305.

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