Bloomberg News

India Plans Price Curbs on Potash, Phosphate Fertilizers

December 28, 2011

(Adds demand forecast in sixth paragraph.)

Dec. 27 (Bloomberg) -- India may re-introduce state controls on retail prices of some fertilizers after soil nutrient rates almost doubled in the past nine months, Srikant Jena, junior fertilizer minister said.

“We are considering various options to bring down prices of di-ammonium phosphate and muriate of potash fertilizers,” Jena said in an interview in New Delhi. “Price control could be one of the options.”

India ended state controls on fixing the retail prices of di-ammonium phosphate and potash in April 2010 to reduce government subsidy on fertilizers. Price controls may boost fertilizer use, potentially increasing imports from producers including Potash Corp. of Saskatchewan Inc. and OAO Uralkali.

Potash prices in India have surged to 11,300 rupees ($213) per ton from 5,055 rupees in March and di-ammonium phosphate to 18,200 rupees a ton from 10,750 rupees, according to data from the Fertiliser Association of India.

“Other options to check price rise include streamlining distribution and rationalization of marketing network,” Jena said. The price surge has led to a pile-up of more than 2 million metric tons of imported fertilizers at ports, he said.

Fertilizer consumption in India, the world’s third-largest potash importer, may tumble for a second year as rising prices of the soil nutrients deter farmers, U.S. Awasthi, managing director of Indian Farmers Fertiliser Cooperative Ltd., which represents 55 million farmers, said on Dec. 5. Consumption of di-ammonium phosphate and potash may drop as much as 35 percent in the year starting April 1, compared with normal use of about 15 million tons, he said.

Sales of potash and phosphate fertilizers dropped 29 percent to 7.11 million tons in the seven months ended Oct. 31 from 10.06 million tons a year earlier, data from the fertilizer association showed.

--Editor: Thomas Kutty Abraham

To contact the reporter on this story: Prabhudatta Mishra in New Delhi at pmishra8@bloomberg.net

To contact the editors responsible for this story: Richard Dobson at rdobson4@bloomberg.net; Arijit Ghosh at aghosh@bloomberg.net


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