Fertiliser companies cheer good rain forecast

KOCHI | NEW DELHI: The forecast of a normal monsoon has spread cheer among fertiliser companies which are expecting to make good the loss they suffered from poor sales last year due to deficient rains and rise in input prices.

Prices have fallen this year making it easier for companies to increase sales. "Prices of most fertilisers are under control. On an average, prices have corrected by 1,000-1,500 per tonne," said an official in the Department of Fertilizers.

"Despite a fall in prices, there are few takers as the water level in the Cauvery and the Krishna is low. We should have got sporadic showers by now. With the intensity of the monsoon picking up, we expect better sales," said SV Sreenivasa Rao, chief manager of marketing, Zuari Agro Chemicals.

Iffco, the largest fertiliser cooperative, said the rise in sales could depend on the quality of the monsoon. Sales went down to 100 lakh tonne in 2012-13 from 121.84 lakh tonne in the previous year, said a spokesperson of the company. Besides a good monsoon, an increase in sales will depend on global prices, he said. The current decline in the rupee's value could impact the raw material contracts when they will be done in the next two months.

State-owned Fertilisers and Chemicals Travancore could produce only 5.4 lakh tonne of its flagship complex fertiliser Factamfos against an installed capacity of over 7 lakh tonne due to shortage and high prices of raw materials last year. Prices of main feedstock naphtha went up 50% to 60,000 tonne.

This year, the company is planning to increase the production of Factamfos which has a good demand in southern states. The company's chairman and managing director Jaiveer Srivastava said the company hopes to shift to LNG from naphtha by the end of July, which will help it bring down the cost.