Lower imports of critical fertilizers as a result of worldwide price increases for crop nutrients are unlikely to harm crop yields this year. Reduced potash imports, on the other hand, may have an impact on the "shining" quality of domestically produced fruits and vegetables.
"There was a need to make a decision on chemical fertilizer use, and the government decided to import as per 'real requirement' when worldwide costs skyrocketed," an agriculture scientist said on condition of anonymity. "To be sure, even if there is a reduction in the application of urea, diammonium phosphate (DAP), and Muriate of Potash (MOP), there will be no influence on yield this year," he stated, adding that the soil already has an excess of these nutrients owing to uneven application.
The official target for foodgrain output in 2021-22 is 307.31 million tonnes (mt), with 155.88 mt coming from the rabi season and 151.43 mt coming from the Kharif season. During the 2020-21 crop year, the country's foodgrain output reached a new high of 308.65 mt, while horticulture production reached a new high of 331.05 mt (July-June).
In 2020-21, there were record fertilizer sales of 67 mt, as well as an all-time high import of roughly 20 mt. When asked if the decreased application will have an impact on exportable fruits and vegetables, he said exporters are aware of the consequences (of overuse) and will make sure to utilize potash wisely while it is still available.
Decline in Imports
Potash (K) fertilizer imports have been drastically reduced because the country is entirely reliant on foreign supplies, and the industry is unwilling to bring in more than it can sell due to a fixed subsidy, unlike phosphorous (P), which has seen government support doubled this fiscal, according to industry sources.
Potash imports were 17.4 lakh tonnes (lt) from April to December this fiscal year, compared to 42.3 lt for the entire fiscal year 2020-21, and are unlikely to increase substantially in January-March. Potash (K) fertilizer imports have been drastically reduced because the country is entirely reliant on foreign supplies, and the industry is unwilling to bring in more than it can sell due to a fixed subsidy, unlike phosphorous (P), which has seen government support doubled this fiscal, according to industry sources.
Potash imports were 17.4 lakh tonnes (lt) from April to December this fiscal year, compared to 42.3 lt for the entire fiscal year 2020-21, and are unlikely to increase substantially in January-March.
The government stated in parliament that DAP imports were 42.56 lt between April and January of FY22. About 2.46 lt of this was imported in January as enterprises prepare for the upcoming Kharif season and begin contracts depending on subsidy policy. Finance Minister Nirmala Sitharaman has set aside 16,800 crore for P and K fertilizer imports in FY23, up from 8,260 crore in the BE of FY22 but less than the revised fiscal estimate of 25,087.34 crore.
Higher Prices
In June of last year, MoP prices in India were at $280/tonne (CIF), but by September, they had risen to $445, and by December, they had risen to around $600. Urea prices rose to $1,000 a tonne in November of last year, up from $400 in April. In September, DAP prices rose to almost $700 per tonne, up from around $445 in June.
Potash is mostly utilized in horticulture and plantation crops, whereas urea and DAP are used in all crops. The maximum retail price (MRP) of a 45-kg bag of urea is 242, and the MRP of a 50-kg bag is 268, all prices excluding neem coating charges and any taxes. Since 2012, when the MRP for urea was hiked by $50/tonne to 5,360, the Centre has not modified it.
After worldwide prices rose, the government authorized an additional fertilizer subsidy of Rs 28,655 crore in October last year to protect farmers from having to pay more for DAP. It had already authorized a DAP subsidy of Rs 14,775 crore in June.
Despite the fact that the government pays a fixed subsidy for P and K fertilizers and leaves the selling price to the industry, it had to interfere this fiscal to keep the DAP price at 1,200 per bag (50 kg). In the case of MoP fertilizer, however, no such declaration was made.
