Fertilizer Sales Expected to Rise Due To Expansion in India’s Cultivation Area

Overall sales in the fertilizer market is set to increase by at least 10% in the upcoming winter season due to great soil condition for crop development and steady prices of the raw materials, analysts commented. 

"In comparison to previous years, fertilizer sales for the current Rabi season will be higher. The climate and the constant rain have created a favorable mix this year which will further increase the area of land under cultivation. Additionally, the fertilizer industry has delivered more fertilizer amidst the Covid-19 pandemic and there is sufficient accessibility in the nation, " said Satish Chandra, chief general of the Fertilizer Association of India, a body speaking for all the fertilizer organizations in the nation. 

Fertilizer deals for this year will be 10% higher than the past year, commented K Ravichandran, group head- corporate ratings at ICRA. "The attainment of the crop production targets along with the government initiatives will additionally offer help in increasing the buying intensity of the farmers which will positively affect the fertilizer  offtake, " he added. 

Indian Farmers Fertilizer Cooperative Ltd (IFFCO) representative stated, the assessed demand for urea is 18.3 million ton, which is 80,000 ton higher than 2019. 

"Healthy growth can be seen in the specialty segments of the fertilizers and it is expected to further grow in the future. For P&K fertilizers, the international raw material prices has seen negative growth in the past few months due to the pandemic but has started showing positive results and the prices for the same is increasing marginally. Regardless of the expansion, IFFCO had affirmed that they have no intentions to raise the MRP for DAP all through the forthcoming Rabi season. Prices for urea farmgate are constrained by the government and there is no variety in the costs, " the representative said.

Farmers have begun to purchase pesticides from the start of August this year and with the current stable prices prevailing in the market, the sales are increasing and is expected to expand even more in the near future. 

"Prices with respect to phosphatic fertilizers are currently stable and is expected to stay the same way. Currently trading at Rs 24,000 to 25,000 for every ton, phosphatic fertilisers in this rabi season is expected to stay in the same bracket as the kharif season. The same has been confirmed by the business players despite the increment in the prices for raw material," commented Ravichandran.  

In the first half of 2020-21, retail deals of fertilizers rose 31% over a year ago. Energy behind the sales deal of urea, DAP, MOP, NPK, and SSP manures in the country continued positively in the past few months, driven by the expanded harvest area and strong monsoons. 

Expanded crop production grounds for India's late spring kharif season, running from April till September, has empowered farmers offtake. Indian farmers have dramatically increased the harvest land so far this kharif season, with most recent information indicating farmers had planted more than 30 mn hectares starting at June of this year.