Create $ 20 bn fund to buy fertiliser assets abroad: FAI

NEW DELHI: Faced with rising global prices, fertiliser firms have asked the government to create a Sovereign Wealth Fund of $ 20 billion to acquire mineral assets abroad, a top official of industry body FAI said today.

"We have asked the government to form a Sovereign Wealth Fund ( SWF) of $ 20 billion to acquire fertiliser assets abroad in the wake of rising global prices and shortage of fertilisers on the domestic front," Fertiliser Association of India (FAI) Chairman A Vellayan told reporters here.

The dependence on imported raw materials for domestic fertiliser production is making the industry susceptible to international price fluctuations, Vellayan, who also heads the Murugappa Group added.

FAI Director General Satish Chander said that global suppliers have formed cartels and they are increasing the prices, which is adding to the input costs for manufacturing fertilisers.

"Global suppliers, especially in case of potash have formed cartels and have been increasing the prices of the fertiliser. This is leading to rise in input costs and the domestic firms are left with no option but to share the burden with the farmer," he said.

Earlier, a government panel headed by the Secretary, Mines Ministry, has called for the creation of a SWF of Rs 1,000 crore for acquisition of overseas mineral assets, including fertiliser components.

The Working Group on Mineral exploration and development (other than coal and lignite) for 12th Plan (2012-17) in its report has emphasised on public-private partnership for the acquisition of fertiliser assets abroad.

The Planning Commission has also suggested setting up of a sovereign wealth fund with an initial corpus of $ 10 billion, mainly to invest in energy and mining assets abroad.

India imports 100 per cent of its requirement of potash and 90 per cent of that of di-ammonium phosphate (DAP).

It imported 7.41 million tonnes of DAP and 4.5 million tonnes of potash in 2010-11 fiscal.