NEW DELHI: Farmers may have to pay 5-26% more for fertilisers this crop season due to an increase in the global prices of key fertiliser components phosphate and potash, according to analysts and industry executives. They, however, said if the government increases the per unit subsidy for fertiliser companies, the price impact on farmers will be less. Urea prices usually remain steady due to government controls. At Rs 1,400 per bag (50 kg), the price of di-ammonium phosphate (DAP) is 8% higher than what farmers paid in the kharif season this year. It can increase by 4% by October, analysts said, adding that the price of muriate of potash (MoP) may increase by 26% to Rs 880 per bag (50 kg) while , phosphorous, and potash (NPK) grades may rise by 5-10% to about Rs 960-1,180 per bag (50 kg). "The rupee depreciation has ensured that the landed cost of raw material has gone up. Companies will have to see how they absorb the rise, which can be in the range of 5% to 15%, depending on the fertiliser,” said Rakesh Kapur, joint managing director of the Ltd (Iffco). Kapur said the industry had ample stock of fertiliser for the upcoming rabi season. ”Potash prices have just increased by $50 a tonne and even phosphate prices have increased by $103 a tonne in the last one quarter. Another rise is expected by October,” he said. The calculation of increase in DAP by 12% and MoP by 26% is based on the premise that the impact of currency and raw material price increase will be passed on by the industry to the farmers to conserve margins, said K Ravichandran, senior vice-president, corporate ratings, , a ratings and research firm. “In case the government increases the per unit subsidy to fertilisers companies, then the price impact on farmers will be less,” said Ravichandran. According to the agriculture ministry, the fertiliser industry will be able to meet the requirement for this rabi season. The assessed requirement of urea is 162.74 lakh tonnes, 50.46 lakh tonnes for DAP, 17.28 lakh tonnes for MOP, 52.19 lakh tonne for NPK, and 29.80 lakh tonne for SSP. India imports about a quarter of the estimated 310 lakh metric tonnes of urea consumed in the country every year. The entire requirement (about 30 lakh tonnes) of MoP is met from imports, since there is no resource of potash in India.
Unless the Indian government increases the per unit subsidy for fertiliser companies, farmers may be paying 5% to 26% more for fertilisers this season due to rupee depreciation and the increase in global prices of phosphate and potash, according to analysts and industry executives. DAP is 8% higher than what farmers paid in the July to October kharif season, at INR1,400 ($19.30) per 50 kg bag, and NPK may rise 26% to INR880 per 50 kg bag, while MoP may increase by 5-10%, or INR960-INR1,180 per bag, analysts said. India imports 30,000,000 metric tonnes of NPK every year.