Fertilizer prices may further rise on costlier chemical imports

Kochi, 7 July (Commodities Control) Prices of fertilizers may further rise as a sharp increase in the prices of various chemicals used for fertilizer production raised concerns over fertilizer cost across India, especially in the southern region.

Huge increase in the import price of various raw materials including Ammonia and Phosphoric acid may lead to the increase in fertilizer prices which are very essential during Monsoon seasonal farming activities.

Import price of Ammonia which is a major ingredient in Ammonia based fertlisers increased to US $ 600 / tonne from US $ 300 during last June – July months. Phosphoric acid, which was available at a price tag of US $ 700/tonne, now fetches $ 1000/ tonne. Price of Sulfuric acid now edged up to $ 130-140, a tonne.


This was available in the global market at $ 80 -100 during last year. Sharp increase in the input cost disrupts the production of fertilizers which are used widely for plantain, paddy and vegetables. Import price of sulphar was almost doubled at a price tag of $ 200/ tonne.

According to experts such a huge increase in the price of chemical raw materials is rather unusual and since 2007 -08 prices shown reasonable change till 2020.

Covid pandemic had upset production of various chemicals in producing countries, hence the current up trend , they said. In order to avoid increase in prices of chemical fertilizers central government recently increased subsidy for the fertilizers.

In June , the Union cabinet had raised subsidies for Di – Ammonium phosphate (DAP) and non-urea fertilizers by Rs 14,775 crore, in order to immunize the farming community from price increase.

In 2021 -22 budget allocation for fertilizer subsidy was Rs 79,600 crore and the latest is an additional one. Interestingly the revised estimate of fertilizer subsidy for 2020-21 at Rs 133,947 crore is above the originally budgeted amount of Rs 71,309 crore. The sharp rise in raw materials may further disrupt the fertilizer subsidy budget in the current financial year.

So the raw material price increase will not affect the farmers immediately. But private sector fertilizer manufacturers are not in a position to continue with the latest upward trend in import. Market sources said that price might go up since there is no immediate possibility for a down trend in the global prices of chemicals.

Not only price but import expense is also on the increase. Price of LNG, which is widely used by fertilizer manufacturers is also likely to go up . Farmers across the country have concern over fertilizer prices as producers may increase prices sooner or later.

(By Commoditiescontrol Bureau: +91-22-40015505)