From the Editor

Continuing the discussion on the fertilizer minerals in the editorials of April and May 2014 issues, let us now review
the economic aspects of the fertilizers, relating to India.
PTI report of 19th December 2013 reveals that India imported 5.75 MT of urea valued at $1.64-billion,
approximately `98-billion, in the first eight months of 2013-14. Import of nitrogen-rich fertilizer was at 8.04 MT in
2012-13, valued at $2.94-billion or `175-billion. Import of urea in the first ten months of 2013-14 was 6.79 MT,
valued at $1.92-billion. Urea is sold to Indian farmers at subsidised price of `5360 per tonne.
Urea not being a mineral-based fertilizer, the cost of import of urea for domestic use can be reasonably justified,
though this drain on exchequer as urea import bills could have been averted by larger domestic production. Many
urea manufacturing units in India are archaic and out-dated, bereft of modern technology; most of them function
below installed capacity. The Wall Street Journal has reported on July 09, 2013 that the government had cleared
only four urea plant proposals out of 15 applications. This is under new investment policy notified in January 2013
to reduce dependence on imports and not specific or dedicated to urea or fertilizer production or importreduction.
Lack of firm policies on gas price and distribution to the fertilizer plants too is an irritant, since natural gas is a
critical requirement for urea production. In a nutshell, neither actions to enhance the domestic urea production were
taken, nor was financial allocations in annual budgets to increase the capacity for domestic production of urea made
over the years.
As regards mineral-based fertilizers, according to the ministrys data, import of phosphate and potash fertilisers, diammonium phosphate (DAP) and muriate of potash (MoP) touched 5.56 MT during April 2013-January 2014. The
infodriveindia.com had last year announced India's fertilizer imports in July 2013 at $706.87-million or `42420million. The miningweekly.com reports on 22-4- 2014 that in this period, Indian potash imports were about 3.1 MT,
of which 2.5 MT was imported at $427 (~ `25600) per ton, while the balance had been contracted at $369 (~`22100)
per ton. The price of $427 was $17 above the price for China. India plans to buy 800,000 tons of potash at $322 per
ton on a cost and freight (CFR) basis from 1st April 2014. This works out to about `15.5-billion for 800,000 tons; at
this rate, the cost of about 3.5 MT of annual potash requirement sums up the total bill on account of potash import.
India relies wholly on overseas supplies to meet its potash demand for fertilizers. India has cut potash subsidies for
2014-15 to contain rising fiscal deficit.
The agrimoney.com had quoted on 18th June 2012 the Russian fertilizer group PhosAgro to report that India's
phosphate imports are far bigger than thought, and also that contract for over 2 MT has been signed. This would
ease concern over the announcement by the North America's PhosChem consortium of a 500,000 to 700,000-ton
deal at a whopping $580 per ton. These figures reveal the enormity of the import bill for Indias phosphate imports.
Indias dependence on phosphatic and potassic fertilizers to the extent of 90% and 100% respectively on imports is
due to non-availability of raw materials within the country. India has limited reserves of rock phosphate of poor
quality which can be used for production of only Single Super-Phosphate (SSP). In the last two years, import of
fertiliser in volumes and value has increased by 30%. In 2012-13, urea import was around 8 MT, while DAP and
MoP were 7.75 MT.
Imports of urea, DAP and MoP are likely to escalate despite high prices due to the demand in domestic agricultural
markets for N-P-K fertilizers. Therefore, import bills in the years to come for DAP and MoP are also likely to
increase steadily depending on the international prices of DAP and MoP, until and unless new occurrences of potash
and phosphates minerals are located and mined within India.
Food security, in reality, hinges on the availability of inexpensive mineral-based fertilizers, as much as our ability to
spike their imports to contain the current account deficit. Possessing potash and phosphate minerals within Indian
terrain ensures the twin advantage of Food Security and strong Rupee. Adequate funds need to be allocated in
annual budgets for the exploration of fertilizer minerals. Organizations, including government-funded departments,
on their part, have to launch meaningful, objective and result-oriented programmes for the search and exploration of
fertilizer minerals mentioned in the April and May 2014 editorials.
The editorial of next issue will carry the last part on the subject of fertilizer minerals.