As the sowing for rabi season is at its peak, the demand for fertilizers will also increase. The country needs 650 lakh metric tonnes (LMT) of fertilizers every year, almost two LMT per day. However, during the peak of the season, it will go up to four LMT per day. Union Fertilizers Secretary Arun Singhal uses the Integrated Fertilizer Management System, an in-house software to monitor the availability and supply of fertilizers. Talking to The Hindu amid reports of a supply crunch and rise in prices of both the fertilizers and their components globally due to the Ukraine-Russia conflict, Mr. Singhal said the country has sufficient stocks to meet the rabi requirement. Excerpts from the interview:
Has the Ukraine-Russia conflict impacted the availability of fertilizers in India?
Our trade, on the contrary, with Russia has gone up. It has gone up many times because fertilizer is not a sanctioned item. Fertilizer trade between companies is on. We can make payments through telegraphic transfer mode. When they submit proof of dispatch, transfer is made from here. That is working well and our imports from Russia has gone up. [Besides]…we go to many countries for our supplies. We are not dependent on one country. The basic thing we do to guard against such situations is to broad-base our sources or supplies. As of now, we import potassic fertilizers entirely as we do not have potash in the country. So Muriate of Potash (MOP) is entirely imported. We manufacture about 40 LMT of Di-ammonium Phosphate (DAP )and import 80 LMT. There is a heavy import dependence there. For nitrogen (N), phosphorus (P) and potassium (K), we manufacture around 100 LMT and import around 10-15 LMT. So, in NPK, we manufacture all the requirements here in the country. Similarly, Single Super Phosphate (SSP) we manufacture entirely. For instance, we require about 40 LMT of MOP every year. We have a long-term agreement with Canada for 15 LMT for three years. We have MoUs with Israel for seven LMT, with Jordan for 2.75 LMT and with Germany for 1.05 LMT. Recently, we signed an agreement with Russia for 10 LMT. So, against the requirement of 40 LMT, we have long-term MoUs for about 35 LMT. Of course, we purchase as it is available anywhere else in the world. Recently, Belarus was not able to supply to us because of the war. But we absorbed that shock because there were such MoUs. So when you broad-base your sources, you are somewhat insulated from such shocks.
The rabi season is at its peak. What is your assurance to farmers?
There is no shortage of any fertilizers in the country today. For example, for urea, the total requirement of the season is 180 LMT. We started the season with an opening stock 55 LMT. We have already sold 50 LMT of the demand. So 130 LMT remains to be sold in the next four months. As of now, we have a stock of 58 LMT. We produce 23 LMT every month. So there is no shortage. For DAP, the requirement is 55 LMT for the entire season. We already sold almost 29 LMT. More than half of the demand has already been met. We have a stock of 17.72 LMT. We are producing and importing DAP, which goes on throughout the season. The position is comfortable. By the end of December, we will meet the demand for DAP for rabi. Then, from January onwards, we will start stocking DAP for kharif. We would like to go with comfortable opening stocks of at least 30% requirement of all the fertilizers for kharif, the next crop season. On NPK, the demand was 57 LMT. We have sold 19 LMT so far. We have stocks of 29.78 LMT now. We keep on adding every month. Similarly, MOP requirement was 14.34 LMT. We have sold 3.58 LMT so far. Current stock is 7.60 LMT. So, for all the four major fertilizers, there was no shortage at all. During the peak of the season, thousands of trucks and rail rakes will be moving every day. Sometimes, there could be some bottlenecks and hiccups, which could create a brief supply shortage. But overall, there is no shortage. The prices are also stable. It is for the State governments to take action on issues of black marketing. Our job is to send fertilizers to stocks.
Is the Centre increasing public investment in fertilizers sector? Is it because of the global situation?
Fertilizers are a non-strategic sector. So, all the PSUs in the fertilizer sector have to be disinvested. This is a Cabinet decision and it has nothing to do with profit or loss. There is no rethink about the policy. Every PSU in the fertilizer sector has to be disinvested or closed. As far as the impact of Russia-Ukraine crisis is concerned, no fertilizer manufacturer can survive without government subsidy. There is no reason to manufacture in the government sector. The decision to revive five units has nothing to do with Russia Ukraine war. The new units we set up are comparable to the best in the world. These new plants will also be disinvested eventually.
So, will the global situation increase the fertilizer subsidy?
The fertilizer subsidy could go up to ₹2.5 lakh crore. The global situation is the reason. The price of gas, an essential component of urea, has gone up. We will request the Finance Ministry to increase the subsidy this year.
How do you see the demand for direct transfer of fertilizer subsidy to farmers?
A small farmer is not a cash-rich person. For him to come with the full cost of fertilizers and get it reimbursed later on is a painful thing. For one hectare, the non-subsidised cost would be around ₹20,000. Even if we transfer the subsidy within a day, it is difficult for the farmer.
What was the logic behind One Nation One Fertilizer?
It is to save on logistics. For example, urea is a molecule. One cannot produce a molecule of a different kind. If anything is mixed with urea, farmers will quickly identify it. So, one cannot say that one company produces better urea than another company. The product is standardised. Every company has a mandatory lab to check the quality of the product. Fascination over certain brand is built in such a manner that the product has to be sent 2,000 kilometres away. If every factory caters to the area around it, it will minimise the cost of transportation and use of railway rakes. All fertilizers are essentially the same. So, there is no need to have different brands to confuse the farmer. So, we named the fertilizer Bharat and we will save ₹500 crore every year.