India to subsidize MAP imports on DAP shortage

02 October 2007 00:31  [Source: ICIS news]

NEW DELHI (ICIS news)--The Indian government has decided to bring imported mono ammonium phosphate (MAP) into the subsidy scheme for so-called decontrolled fertilizers, official sources said on Monday.

The so-called price concession scheme approved on Monday by the Cabinet Committee on Economic Affairs (CCEA) would subsidise importers of MAP at a preliminary rate (base concession rate) of Indian Rupees (Rs)9398/tonne (€167.5/tonne).

Only MAP containing 11% nitrogen and 52% phosphate (grade 11:52:0) would be eligible for subsidy.

CCEA also decided to stipulate a maximum retail price of Rs9350/tonne for MAP, which is the same as for diammonium phosphate (DAP).

The import of MAP on Government account would be within the overall ceiling for import of DAP in the current financial year ending 31 March 2008. Such imports would be limited to the extent of a shortfall in availability of DAP.

The Government said that private companies were free to import MAP in any quantities subject to the price concession payable on imported DAP.

MAP imports would help ease the shortage of DAP as well as help in stabilising the prices of other phosphatic fertilizers, it added.

All products other than urea are referred to as decontrolled fertilizers. The price and subsidy on urea is controlled separately. The Government, however, regulates prices of decontrolled fertilizers through concession scheme.

A fertilizer industry source said that there was acute shortage of DAP in the international market. Several State Governments have feared a shortage of DAP during the winter crop season beginning mid-October.

On the basis of past trends, the Department of Agriculture has estimated DAP demand at 4.3m tonnes for this season. The demand for urea and muriate of potash is estimated at 14.43m tonnes and 1.65m tonnes respectively.

In August, CCEA had decided to continue to buffer stocking of DAP and muriate of potash (MOP). Indian Potash Limited would maintain buffer stock of 350,000 tonnes of imported DAP and 100,000 tonnes of MOP during current financial year 2007-08 to cope with any shortfall in availability in part of the country.

(€1.00 = Rs56.44)

By: Naresh Minocha
+65 6780 4359

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