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    Cheaper Sulphur, Ammonia & Phosphoric Acid to lower up fertilizer prices by 17%


    The retail prices of major fertilisers have lowered by 17% which means farmers have to shell out lesser money for the same this rabi season due to a decrease in the global prices of fertiliser components. Urea prices however, have remained steady.

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    New Delhi: Farmers may have to pay 6% to 17% less for fertilisers this rabi season, than what they paid this summer, due to a decrease in the global prices of key fertiliser components sulphur, ammonia and phosphoric acid, according to analysts and industry executives.

    State-controlled urea prices, however, remained steady at Rs 265 per 45 kg bag.

    The demand for fertilisers will peak in the coming week with farmers going for planting of wheat, mustard, barley, masur and other crops.

    Current retail prices of major fertilisers like Diammonium phosphate (DAP) are 17% less at Rs 1,200-1,250 per bag of 50 kg than the 2019 kharif season prices. The nitrogen, phosphorous and potash (NPK) grades are costing 6% less at Rs 900-1,100 per 50-kg.

    Global DAP prices have fallen in recent months due to additional supplies from Saudi Arabia, faltering demand and fall in prices of key raw materials viz sulphur and ammonia with current prices at around $300 per tonne, said K Ravichandran, senior vice president, group head- Corporate Ratings, ICRA, a ratings and research firm..

    Ravichandran said, retail prices of NPK grades have also seen a drop of 4%-6%. “The drop-in prices have been contained by the rupee depreciation against the US dollar,” he said.

    As recent as last week IFFCO which reaches to 5.5 crore farmers with more than 35000 cooperative societies, reduced the rates for the third time this year since July by Rs 50 per bag of its complex fertilisers for the benefit of farmers.

    “In June DAP which was being sold for Rs 1,450 per bag is now being quoted at Rs 1,200 per bag. This will reduce farmers input cost and ensure he gets higher profit,” said Rakesh Kapoor, joint MD, IFFCO.

    According to the industry, the assessed requirement of urea in the rabi season is 16.2 million tonnes, 5.05 million tonnes for DAP, 1.73 million tonnes for MOP and 5.2 million tonne for NPK.

    The Muriate of potash (MoP) which is entirely imported have however seen an increase in prices by 4% . ICRA expects these prices to sustain for the most part of rabi season unless the rupee depreciates further against USD, said Ravichandran.

    “Indian MoP import prices are negotiated typically on an annual basis, with $290 per tonne as the contract price for the current fiscal so far. The contract is due for revision and if the major Indian importers are able to bring about a reduction in contract prices, there may be some scope to reduce the retail MoP prices,” said Ravichandran.
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