IFFCO slashes domestic DAP and NPK fertilizer prices in India
Sylvia Traganida
25-May-2016
LONDON (ICIS)–Indian Farmers Fertiliser Cooperative
Limited (IFFCO) said on Wednesday it has cut
diammonium phosphate (DAP) and nitrogen, phosphorous and
potassium (NPK) fertilizers prices by Rs
1,000/tonne ($14.78/tonne) with immediate effect.
It is understood that the reduction will bring down the price
of these fertilizers by Rs 50/bag across the country.
Speaking at the company’s AGM at Delhi the group’s managing
director U Awasthi said, “If someone bought fertilizers
in the last few days [before the price cut], they will be
reimbursed the difference.”
The company said that this is a ‘gift and service’ to the
farmers of the country.
A trader commented, “This cut is not going to be good
for the CFR (cost and freight) price. If the maximum
retail price (MRP) goes down, then the income of the
importers goes down and that is $15 less in importers’
pockets. The margin is shrinking for importers and the only
way to get it back is to convince sellers to reduce
prices.”
DAP imports in 2016 have been subdued so far due to high
stocks in the country which are estimated around 2m-3m
tonnes. In April 2015-March 2016 India imported 6.6m tonnes
of DAP and there are expectations of similar levels on
predictions of an above average.
At the same time, a settlement for phosphoric acid prices for
Q2 deliveries has not been reached yet between Moroccan
producer OCP and its Indian customers. The price of
phosphoric acid determines whether it is to cheaper to
produce DAP locally using it as raw material or import it. In
December 2015,
OCP settled
first-quarter phosphoric acid prices
for 2016 with its joint venture partners in India at
$715/tonne CFR (cost and freight) with 30 days
credit.
In February, the Indian government reduced
the subsidy allocation for phosphate and potash fertilizers
by over 13% for the next fiscal year to Rs 190bn ($2.8bn)
from the revised Rs219.38bn this year.
($1 = Rs67.67)
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