Financial Daily from THE HINDU group of publications
Sunday, Apr 17, 2005

News
Features
Stocks
Port Info
Archives
Google

Group Sites

Home Page - Fertilisers
Industry & Economy - Fertilisers


Phosphoric acid shortage haunts DAP units; talks with suppliers fail

Ambarish Mukherjee

"Even if a decision is taken today, supplies would reach the factories only by the end of May or beginning of June. But the next date for negotiating the price has not been decided yet. So there may not be any other way but to stop production."

New Delhi , April 16

NEGOTIATIONS between Indian phosphoric acid consumers and international suppliers have fallen through.

The date for the next round of negotiations has not been decided yet.

Consequently, DAP manufacturing units in the public sector, private sector and cooperatives may be forced to stop operations from May for want of the basic raw material.

Fertiliser industry sources told Business Line that Oswal Chemicals and Fertilisers have already stopped DAP production and no supplier till date has booked any vessel for shipments for April and May.

Industry sources said that it takes four to six weeks after booking for supplies to reach Indian ports.

"Even if a decision is taken today, supplies would reach the factories only by the end of May or beginning of June. But the next date for negotiating the price has not been decided yet. So there may not be any other way than to stop production," a highly placed industry official said.

Last year, the negotiated price was fixed at $402 per tonne of phosphoric acid leading to an increase of around Rs 750 crore in fertiliser subsidy.

This time the offer price is $488 per tonne.

India's requirement for this year is 2.25 million tonnes.

However, even at $488 per tonne, global suppliers have offered to supply only 1.5 m.t.

India's annual consumption of phosphoric acid is approximately 5 m.t., out of which 50 per cent is imported.

The domestic phosphoric acid manufacturers too are facing shortage of raw material because the country does not have enough rock phosphate, which is used in manufacturing phosphoric acid.

Last year the Government had increased subsidy for muriate of potash by around 85 per cent and for DAP by around 20 per cent.

This year, going by the existing rate, another 20 per cent increase for DAP subsidy is required, officials said.

Sources in the Fertiliser Association of India (FAI) said that FAI is no way involved in the negotiation process though the negotiations have taken place in FAI office by the Phosphoric Acid Consumer Group headed by the Managing Director of Tata Chemicals.

Stoppage of DAP production may result in serious shortage of fertiliser across the country as sowing for the kharif season begins in the middle of June, FAI officials said.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page


Stories in this Section
Phosphoric acid shortage haunts DAP units; talks with suppliers fail


Record inflow into equity funds in March
Indo-Pak ties: Hopes high on trade front
`VAT law variations to be resolved latest by April 26'
VAT panel draws plan to tackle price rise
Govt to implement CAS `at the earliest' — System to be in place in 3 metros
Passenger car exports rise 28 pc in 2004-05


The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | The Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |

Copyright 2005, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line