India sets costing norms for imported fertilizers

14 July 2008 18:55  [Source: ICIS news]

NEW DELHI (ICIS news)--India has introduced a costing mechanism for imported fertilizers and intermediates which will be factored into its subsidy bill and spelled out its strategy for the import of three phosphate fertilizers, it said on Monday.

Triple superphosphate (TSP), which was last month brought under subsidy cover, would be sold at a maximum retail price (MRP) of Rs7,460/tonne ($174/tonne) across the country.

The monthly subsidy on imported and domestic TSP would be arrived at by taking into account average free on board (FOB) prices published in its Fertilizer Market Bulletin (FMB) plus freight for the previous month or the actual weighted average price (AWAP) of imports for the current month, whichever is lower.

Another fertilizer which has been extended subsidy cover, ammonium sulphate (AS), would be sold at an MRP of Rs 10,350/tonne.

As the demand for this fertilizer is primarily met by domestic producers, the government would only rely on the cost of nitrogen nutrient produced by Fertilizers and Chemicals Travancore Limited (FACT) and Gujarat State Fertilizers and Chemicals (GSFC).

The cost of sulphur in AS would be the same as for other fertilizers.

The monthly subsidy on imported muriate of potash (MOP) would be fixed by taking into account the average C&F (credit and freight) prices for the preceding month published by FMB or the AWAP of imports for the current month, whichever is lower.

The MRP for MOP would be Rs 4,455/tonne.

The monthly subsidy for imported diammonium phosphate (DAP) and imported or domestically granulated monoammonium phosphate (MAP) would be based on the average monthly prices published by FMB and Ferticon from US Gulf FOB, plus Tampa-Mundra freight, for the previous month or the AWAP of imports for the current month, whichever is lower.

The MRP for both DAP and MAP is Rs9,350/tonne.

The government is promoting imported MAP and TSP as substitutes for imported DAP, the supply of which is tight worldwide.

As for nitrogen phosphorus potassium (NPK) complex fertilizers, the government would fix its monthly subsidy by taking average C&F prices of ammonia, sulphur and prilled urea originating from the Arabian Gulf region for the preceding month published in FMB, or an AWAP of imports for the current month.

($1 = Rs42.80)

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By: Naresh Minocha
+65 6780 4359



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