June 26, 2008

India''s fertiliser body warns shortage of phosphatic products

The Fertiliser Association of India (FAI) said Wednesday (June 25, 2008) that its member companies may no longer import and produce fertilisers due to liquidity problems, which may lead to shortage of phosphatic (P) and potassic (K) fertilisers.

The FAI also pointed out that India is heavily dependent on import of phosphoric acid and sulphur/sulphuric acid for production of phosphatic fertilizers.

The association recommends that the export of sulphuric acid and phosphoric acid should be stopped to ensure availability in the domestic market.

The government''s outstanding subsidy payment for fertiliser companies until June 30 would be around INR28,000-30,000.

The liquidity position of the companies has reached a stage beyond which it will not be possible for them to continue with import and production of fertilisers in the country, FAI explained.

The problems of P&K-based fertiliser units are further worsened as there is no approved policy on P&K fertilisers since the previous one expired on March 31.

As such the industry does not know the cost of raw materials or finished fertilisers that will meet government approval.

Furthermore, the association said that international prices of raw materials and finished fertilisers are steeply rising, thus the government should increase the subsidy as well, especially during the monsoon season.

US$1 = INR42.72 as of June 26, 2008