Financial Daily from THE HINDU group of publications
Friday, Jul 30, 2004
Financial Daily from THE HINDU group of publications Friday, Jul 30, 2004 |
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Agri-Biz & Commodities
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Fertilisers Industry & Economy - Exports & Imports MMTC buys DAP from global market to meet shortfall Ambarish Mukherjee
New Delhi , July 29 IN a fire fighting measure to meet the shortfall of di-ammonium phosphate (DAP) fertiliser in the domestic market, the Government controlled MMTC Ltd on Thursday booked a cargo of 60,000 tonnes of DAP from US-based Phoschem. The move is aimed to meet the shortfall in DAP production by domestic producers faced with severe shortage of phosphoric acid used to manufacture DAP. According to fertiliser industry sources, the deal had been struck at a rate of $260.5 cfr to India for August shipment. At this price, industry estimates that the subsidy would work out to be more than Rs 5,000 per tonne as against the earlier subsidy of around Rs 2,400 per tonne. MMTC, however, is extremely tight lipped about the deal. When contacted, MMTC officials said that "while the existing market rate is around $270-272 per tonne, we have been able to negotiate a lower price." The officials said that the price is "lower than the existing market price but declined to reveal the exact figure citing commercial reasons. The official also mentioned that MMTC is expected to make some more purchases in the coming days. "So if we reveal the price, our commercial interest may be affected," officials said. The move assumes significance, according to fertiliser industry sources, because the Government is yet to take a decision on the import price of phosphoric acid used to make DAP which the industry has negotiated at an average price of $398 per tonne. "But buying DAP at $260.5 would translate in a derived price of around $442 per tonne. This is equivalent of buying phosphoric acid at $442 per tonne," industry sources said and added that MMTC had last purchased DAP from the international market at a rate of around $204 per tonne about six months ago."
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