04 November 2011 11:40 [Source: ICIS news]
By Lauren Williamson
SANYA, China (ICIS)--There is a push to bring urea fertilizer into ?xml:namespace>
The NBS was introduced in 2010 and only covers phosphate (P) and potassium (K) fertilizers.
But at an International Fertilizer Association (IFA) conference in
“The NBS has been well received by all stakeholders. It’s good for the country, good for the farmer, good for everyone,” Chander told the crowd.
It’s also good for the government, as it allows the state to recoup more money from citizens after it spends a large portion of the state’s budget on securing imports.
Essentially, the NBS allows the government to import P and K fertilizers in large quantities but adjust the maximum retail price (MRP), or the subsidised price farmers pay, based on the cost of the imports.
Currently, the price for urea is set at rupees (Rs) 1,250/50kg bag ($25/50kg, or $500/tonne), no matter what price the government pays for the imports.
The most recent purchase tender closed on 5 October and was issued by Minerals and Metals Trading Corporation of India (MMTC). Though there were initial indications the country would only buy around 800,000 tonnes,
The urea price was $522-525/tonne CFR (cost and freight), depending on discharge port. This nets back to around $490/tonne FOB (free on board) for
In the long term,
A fertilizer trader close to the situation said, “It’s the minister in power who doesn’t want this change because it’s an election year. He doesn’t want to lose voters. But everyone else wants it so it will happen - it’s just a matter of when.”
Chander told conference delegates that he felt confident it would happen before the country began its 2012 imports. But he issued a warning as well.
“If the [international] prices go up, then there is going to be demand destruction. Farmers will pay higher prices but only to a certain level.”
For more on urea visit ICIS pricing fertilizers
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