Fertilizer Companies Raise DAP & NPK Rates in Response to Increase in Input Costs

With input costs skyrocketing, fertilizer companies have begun passing along a portion of the cost to farmers. According to sources, fertilizer major IFFCO has raised the price of DAP from Rs 1,200 per bag to nearly Rs 1,350 per 50 kg bag (a 12.5% increase), while the price of one variety of NPKS has been raised to Rs 1,400 per 50 kg bag from Rs 1,290 per bag (an increase of 8.5 percent).

The price increase for NPK-1 and 2, which are other grades of NPK fertilizer, has been a nominal Rs 20 per bag to Rs 1470 per bag. The existing stock will be sold at the old prices. IFFCO is one of the most important producers. DAP, as well as a major player in the non-urea fertilizer market.

According to sources, other private companies are either considering or have already increased their retail rates for non-urea fertilizer. According to trade and market sources, NPK in its various grades and compositions is one of the most widely used fertilizers in the western and southern parts of the country during the Kharif season.

The price of NPK varies depending on the grade and the proportion of the main raw material used in the fertilizer, which is nitrogen, phosphorus, potassium, and sulphur. NPK is available in nearly 15-20 grades.

Meanwhile, industry sources have stated that the final picture of the actual retail price of a 50-kilogram bag of NPK will be determined by the quantum of subsidy mandated by the nutrient-based subsidy regime that has been notified. by the Central Government for the fiscal year 2022-22

"The subsidy notification is expected to be announced soon," said a senior industry official. Since the Russia-Ukraine crisis, not only has the price of finished DAP, NPKS, and Muriate of Potash (MOP) risen dramatically, but so have the raw materials used in their production.

India imports nearly all of its MOP requirements, while DAP imports account for roughly half of annual consumption. In the case of NPK, the country produces approximately 80% of the annual requirement domestically, whereas urea requires imports to meet one-third of the annual demand.

Since late February, the landed price of finished DAP in India has risen from around $900 per tonne to nearly $1050-$1100 per tonne, a 17-22% increase.

The landed price of phosphoric acid, which is fixed on a quarterly basis, was set at $1530 per tonne for the January to March quarter, up from $1330 per tonne the previous quarter, representing nearly 15% increase.

MOP prices, which had been imported into India under contract until November 2021 at around $280 per tonne, have risen as a result of the conflict. The price has now risen to nearly $500 per tonne (a rise of 78.57 percent).

Ammonia prices, which were quoted at around $900 per tonne prior to the conflict, have risen to nearly $1050-$1100 per tonne (for the middle east origin ones). Since 1995, this is the highest price for ammonia ever quoted. Sulphur prices, which closely mirror global Brent crude, were around $300 per tonne prior to the conflict and are now around $450-500 per tonne (a rise of over 50 percent).