India is the second biggest consumer of fertilizer in the world next only to China.According working group report on fertilizer industry for twelfth five-year plan all India demand forecast of fertilizer 2012-13 to 2016-17 are given table.
Table:Demand forecast of fertilizer products (thousand tonnes) 2012-13 to 2016-17
*For direct consumption
The Indian Fertilizer companies produced around 32.4 million tonnes of fertilizer in the year 2012-13 However, the total availability was short of demand and was met through imports. Of total fertiliser production, urea output increased to 22.6 million tonnes in FY12-13 from 22.0 million tonnes in FY11-12 due to better capacity utilization. While production of di-ammonium phosphate (DAP) output down 3.6 million tonne in FY12-13 from 4.0 million tones last year, output of NPK (nitrogen, phosphate and potassium) decreased 6.2 million tonnes in FY12-13 from 7.8 million tonnes in FY11-12.(As shown in Fig 1)
India has 30 manufacturing units of Urea with an Installed capacity of 21.6 million tonnes till 2013. There are 12 units of DAP producing plants with a combined capacity of 8.3 million tonnes. Complex fertilizers in the country have installed capacity of 6.4 million tonnes from 19 units. Highest number of fertilizer units in the country belongs to SSP. India has 85 SSP units with a combined production capacity of 7.7 million tonnes (As shown in Fig 2).
India is meeting 80 per cent of its urea requirement through indigenous production but is largely import dependent for its requirements of phosphatic and potassic (P & K) fertilizers either as finished fertilizers or raw materials. Its entire potash requirement, about 90 per cent of phosphatic requirement, and 20 per cent urea requirement is met through imports.
In India , complex fertilizer is produced by public sector, cooperative sector and private sector players. Taking a closer look at the peroduction scenario of complex fertilizer in the country which has witnessed an overall negative growth for the period from 2008-09 to 2012-13, maximum fall in production by both cooperative and the private sector was witnessed between 2010-11 and 2012-13.
The entire requirement of around five million tonnes of potassic fertilisers would be met through imports as India does not have commercially viable sources of potash. With a view to make the nation self-sufficient in urea fertiliser, the Fertiliser Ministry has moved a proposal to boost investment in the sector.
During this first month of 2013-14 finacial year, India imported 6.8 million tonnes of urea valued at USD 1.92 billion. The cost of inward shipments was comparatively less during this year. Oman India Fertilizer Company (OMIFCO) is a joint venture between Oman Oil Company, Indioa Farmers Fertiliser Cooperative Ltd and Krishak Bharati Cooperative Ltd. In 2012-13, 1.83 MT of urea was from imported from OMIFCO.
Table: Consumption, Production and Imports of Fertilizers from 2000-2013 (thousand tons of nutrients)
Source: Department of Fertilizers
In current financial year FY 2013-14 the subsidy bill would reach to Rs 67,971 crore. The government had increased the total fertiliser subsidy in the July budget at Rs 72,970.30 crore for the entire 2014-15 fiscal from Rs 67,970 crore proposed in the Interim Budget. Fertiliser subsidy paid to the companies has declined by about 41 per cent to Rs 21,300 crore as against Rs 36,000 crore paid in the corresponding period the previous financial year.
While the subsidy is fixed by the government in case of phosphate and potassic (P&K) fertilisers like Muriate of Potash (MoP) and Di-ammonia phosphate (DAP), companies are free to decide prices for others. In case of urea, a controlled commodity, the retail price is fixed at Rs 5,360 per tonne, and the difference between the cost of production/imported price is paid as subsidy to the companies.
Table: Government Subsidies on Fertilizer
(In crores of Rupees)
|Imported (urea) Fertiliser||13716||15133||12044||12300|
|Sales of decontrolled fertilizer with concession to farmers||36089||30480||29427||24670|
|Total Fertilizer Subsidy||70013||65613||67971||72970|
Source: Fertilizer Association of India
In addition to urea, 25 grades of P & K fertilizers namely di ammonium phosphate (DAP), muriate of potash (MOP), mono-ammonium phosphate (MAP), triple super phosphate (TSP), ammonium sulphate (AS), single super phosphate (SSP) and 18 grades of NPKS complex fertilizers are provided to farmers at subsidized prices under the Nutrient Based Subsidy (NBS) Policy.
Farmers pay only 50 per cent of the delivered cost of P & K fertilizers, the rest is borne by the Government of India in the form of subsidy. The Government has also included seven new grades of NPKS complex fertilizers under the NBS Policy. At present 25 grades of P & K fertilizers are under the NBS Policy.
Some of the public sector companies in India fertilizer industry: