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New Fertilizer policy to revive 8 sick fertilizer unit

Urea imports have been increasing sharply and the government is now resorting to revive to sick units to reduce dependency of imports. The sick units will be handed over to public sector units on nomination. If they are not ready, it will be revived by public private partnerships. The new operator will bring in funds and acquire modern technology and machineries. It is estimated roughly Rs.30,000 to Rs.50,000 million for each fertilizer unit

Fertilizer industry seeks subsidy on Sulpahte of Potash (SoP)

According to the new Nutrient based Subsidy scheme, only DAP, SSP, TSP and MAP are under the NBS. The industry demands subsidy to add Sulphate of Potash(SoP). Currently, Muriate of Potash (MoP) is the only fertilizer covered under NBS which has high chloride content which are not desirable which can lead to yield losses and reduced protein and starch content. Also, the application of MoP is not suitable for saline soils. However, SoP is more expensive and including it under NBS will reduce pressure on MoP which is only potassium based fertilizer.

New Urea Policy to help profitable companies

To overcome severe shortage of urea in the country, the new policy allows fertilizer companies to get a subsidy with a ceiling of $425 a tonne to the floor price of $ 250. This is in contrast with earlier policy of cost –plus method. According to this policy, any company which produces urea in their existing capacity will get import-parity price for 85% of its production, while those who produce additional urea with brownfield expansion will get subsidy for 90% of their production. However, only companies with cash-flow and deeper pockets can fund their expansion, knowing that lack of feedstock infrastructure.

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