Fertiliser imports in place before rains.

Mumbai: India, one of the world’s leading importers of potash, has secured contracts for 4.7 million tonne of the soil nutrient at $370 per tonne for FY11 with option to buy more, nearly 20% cheaper than last year, the head of a top fertiliser company said.

The country, which also imports most of its diammonium phosphate (DAP) requirement, has tied up 7 million tonne DAP at $500 a tonne, Udai Shanker Awasthi, managing director of Indian Farmers Fertiliser Co-operative, or IFFCO, said on Thursday. This year the fertiliser demand is likely to rise by 3-3.5%, he said. A good June-September monsoon allows farmers to spend more on fertilisers, as other input costs such as procuring underground water, come down, he added. Most sowings begin in June.

India imports nearly one third of its total fertiliser requirement, with potash and phosphate constituting bulk of it. Nitrogenous fertiliser urea accounts for more than half of India’s total fertiliser usage, but the domestic fertiliser units cater 70% urea demand.

As per IFFCO data, India’s fertilizer consumption stood at 53 million tonne in 2009-10, up 6% on year, as farmers tried to bring more area under cultivation, despite a weak monsoon.

IFFCO currently produces more than 7 million tonne of fertilisers, including urea and phosphates and has ties with 40,000 co-operative societies all across India. Indian buyers have room to import an additional 2 million tonne of potash at a similar price, in case demand spikes, Awasthi said.

Earlier this year, the Indian government partly eased its control over pricing of several crop nutrients and raised prices of urea in a move aimed at capping the subsidy and helping improve the country’s fertiliser mix.

Following the government decision, fertiliser prices are coming down and going forward the price structure in the country would be rationalised further, he said.

This has brought in very big change in whole fertiliser industry in the world. Now, India is the deciding factor and will decide the price movement, he added. Awasthi, who has been heading the company since 1993, said with overseas supplies assured, there was no scarcity of fertilisers in the country.

In February, IFFCO acquired a 10% stake in Calgary, Alberta-based Americas Petrogas, and a 20% stake in its unit GrowMax Agri Corp, which owns a potash brine project currently being developed in Peru.

Source : Financial Express