IFFCO petitions New Delhi on fert industry finances

30 April 2008 14:15  [Source: ICIS news]

LONDON (ICIS news)--One of India’s largest fertilizer producers and importers has written to the Department of Fertilizers (DoF) to find a solution to the country’s unpaid subsidies and high feedstock costs, a source at the company said on Wednesday.

Indian Farmers’ Fertilizer Cooperative (IFFCO) wrote to the DoF expressing concern at the level of unpaid subsidies for fiscal 2007-2008, reportedly put at around $20bn (€13 bn).

The producer also cited problems with credit, high interest rates and the cost of working capital as well as record high feedstock costs, all combining to make phosphate fertilizer production unprofitable.

Sources at IFFCO said that production may well be curtailed in the medium term unless a solution was found.

“It is not just us that is suffering, the whole industry is pressing the DoF,” said IFFCO general manager RC Gupta.

IFFCO is generally regarded as one of India’s best run and financially secure fertilizer companies.

“The situation affects us most because we are one of the biggest, but every DAP producer is suffering,” Mr Gupta added.

“It may well affect DAP production longer term,” Gupta said. “We are not sure how long we can continue to produce and may have to cut production, but at some point [a curtailment] is bound to happen.”

Indian domestic DAP production has consistently lagged behind target due to feedstock supply issues and financial problems, hence its increasing reliance on expensive DAP imports.

($1 = €0.64)

By: Mike Nash
+44 20 8652 3214

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