Fertilizer imports surge in third quarter

The third quarter of this financial year saw a sharp increase in imports of urea and di-ammonium phosphate (DAP), the most widely-used fertilizers, mainly due to pre-stocking ahead of the rabi season and a rise in prices of raw materials that forced consumers to turn to overseas markets for finished fertilizers.

While urea imports went up nearly a third, DAP imports shot up 66.4%. The third widely-used fertilizer, muriate of potash (MOP), however, saw a marginal decline in imports during the quarter.

“The situation arose as fertilizer production was subdued since the start of the year due to the clearing of the stockpile of inventory, in anticipation of introduction of goods and services tax (GST),” said Urvisha H Jagasheth, research analyst at Care Ratings.


The price of natural gas, which constitutes more than three-fourths of the cost of fertilizer, mainly urea, saw a 17% increase to $2.89 per metric million British thermal unit (mmBtu) during the quarter, and ammonia prices too firmed up.

Domestic urea production, which constitutes about 60% of the overall fertilizer production, was down 1.6% while imports increased 27.6%, indicating that the decline in local output was compensated by the increase in imports, Care Ratings said in a report.

Production was down also due to the effectiveness of the practice of neem coating of urea, the report said.