India Ensured Fertilizer Stock More Than The Demand

Notwithstanding challenges faced by COVID19 pandemic, India’s total agriculture commodities export was US$ 17.19 billion between March 2020 and February 2021. India’s export of processed food products too has witnessed a growth of 26.51% in Rupee terms during April-February (2020-21), compared to the same period during the previous year (2019-20). The total value of export of processed products alone was Rs. 43,798 crores during April-February 2021.

The linkages of India’s food production (& exports) are an equally big story and give an idea about the ecosystem India has built. Agriculture is the final product of several inputs and fertilisers are one on the top of them. Most commonly heard one is Urea, which is also called a growth multiplier for crops. It is a highly concentrated, solid, nitrogenous fertiliser. It contains 46.0% Nitrogen. It is completely soluble in water hence Nitrogen is easily available to crops. It contains Nitrogen in a milder form which changes to ammoniacal forms and is retrieved by soil colloids for longer duration. Urea is available in granular form and can be applied by drill and broadcasting. Urea is ideally suitable for all types of crops and for foliar spray which instantly removes nitrogen deficiency. Urea also has a strong and long-lasting effect on crops.

Now come to the policy and ecosystem efforts. Government of India is reviving five closed Fertiliser plants of Fertiliser Corporation of India Limited (FCIL) and Hindustan Fertiliser Corporation Limited (HFCL) namely Talcher, Ramagundam, Gorakhpur and Sindri plants of FCIL and Barauni plant of HFCL by setting up new Urea Ammonia plants of 12.7 Lakh metric tonne per annum capacity each at an estimated cost of Rs 37,971 crore. After the commissioning of these five units, the total production of urea would be increased by 63.5 Lakh Metric Tonne Per Annum (LMTPA).

This is being done in order to reduce the huge import burden, as India imports around 9 million Tonnes of Urea Fertiliser every year and produced around 25.2 million Tonnes in 2021.

Out of these five, the Gorakhpur and Ramagundam Fertiliser plants are already running at 100% capacity, whereas the Sindri and Barauni plants will be opened by December 2022. The Talcher plant will be completed by December 2023.

Fast forward to the now revived Ramagundam Fertiliser complex located at Telangana. It is built at a cost of around Rs 6300 crores, it is funded by a joint venture of PSUs like GAIL, Engineers India limited, National Fertilisers Limited and Fertiliser Corporation of India limited (which operated the older plant).

Ramagundam Fertiliser complex

It can produce around 1.24 million Tonnes of Urea every year, and has a capacity to produce 2200 Tonnes of Ammonia, and 3850 Tonnes of Urea every day.
Work on this project started in 2016 and was completed by March 2021, after which trial runs started and the factory reached 100% capacity on 26th April, 2022.
It will generate direct and indirect employment to around 20,000 people in the area.
The factory will use 2 million metric standard cubic metres per day (MMSCMD) of Natural gas as its raw material which will be sourced from Mallavaram Natural Gas field located in Andhra Pradesh via a 181 km long pipeline.
This is the second linkage i.e., excavation of Natural Gas for agriculture.

Government Policies:

Now let’s shift to the root of this ecosystem. Government of India has notified the New Urea Policy (NUP) – 2015 for existing 25 gas-based urea units with the objective of maximising indigenous urea production; promoting energy efficiency in urea production; and rationalising subsidy burden on the Government.
The implementation of NUP-2015 has led to additional production from the existing gas-based urea units due to which the actual production of urea has increased by 20-25 LMTPA in comparison to the actual production during 2014-15.
Recently, IFFCO (Indian Farmers Fertiliser Cooperative Limited) has developed nanotechnology-based Nano Urea (Liquid) Fertilisers. Department of Agriculture & Farmer Welfare (DA&FW) has provisionally notified Nano Urea as Nano Nitrogen Fertilisers in Fertilisers Control Order, 1985 on 24th February, 2021.
PDM or Potash Derived from Molasses which is 100% indigenously manufactured has been included under Nutrient Based Subsidy (NBS) scheme.
Department of Fertilisers granted permission to Madhya Bharat Agro product Limited Unit-II, Banda Sagar, MP for production of potassic and phosphatic Fertilisers 1.20 LMT per annum.

Paradeep Phosphates Ltd is expected to manufacture additional DAP/NPK complex to the tune of 8 LMT per annum utilising the 2 trains of ZACL Goa Plant.
A new DAP/NPK Plant by RCF with annual capacity of 5 LMT and investment of 950 crore in Thal, commissioned in 2024.

A new DAP/NPK Plant by FACT with annual capacity of 5.5 LMT at a cost of Rs 537 cr. Commissioning in June, 2024.
On exploration of minerals for raw materials for DAP & other Fertilisers in India, discussion is in place with the Ministry of Mines, GSI, MECL & PDIL.
PDM or Potash Derived from Molasses (0-0-14.5-0) which is 100% indigenously manufactured has been included under Nutrient Based Subsidy (NBS) scheme.
All potassic and phosphatic Fertilisers are covered under Open General License (OGL) under the Nutrient Based Subsidy (NBS) Scheme.
Recently, India signed a three-year urea import deal with Oman India Fertiliser Company (Omifco) to ship in 1 million tonnes of the crop nutrient a year. Omifco is owned 50% by Oman Oil Co (OQ) and 25% each by Indian Farmers Fertiliser Cooperative Ltd (Iffco) and Krishak Bharati Cooperative Ltd (Kribhco).
Recently, the government approved a subsidy of Rs 60,939.23 crore for phosphatic and potassic (P&K) fertilisers, including DAP, for the first six months of this fiscal (covering the Kharif season from April 1, 2022, to September 30, 2022), as part of its efforts to provide soil nutrients to farmers at an affordable price. The subsidy on DAP (di-ammonium phosphate) has been increased to Rs 2,501 per bag and the farmers will continue to get the DAP at Rs 1,350 per bag. This way, the Union Government has absorbed the increased international prices of Diammonium phosphate (DAP). Now the world’s cheapest DAP is available to Indian farmers.
Government took proactive steps in pre-positioning Urea, DAP and NPK and other fertiliser supply. As a result, currently, India has more stock for supply of fertilisers for this kharif season than the demand.

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