06 Jun THE FERTILISERS CHALLENGE
THE FERTILISERS CHALLENGE – Today Current Affairs
Ahead of kharif sowing, India faces the challenge of meeting its requirement of fertilisers, supply of which has been disrupted in the wake of Russia’s invasion of Ukraine.
Today Current Affairs
How have the pandemic and the war impacted the supply of fertilisers?
- The pandemic has impacted the fertiliser production, import and transportation across the world.
- Major fertiliser exporters such as China have gradually reduced their exports which has impacted countries such as India, which sources 40-45% of its phosphatic imports from China.
- There has been a surge in demand in regions like Europe, America, Brazil and Southeast Asia but the supply side has faced constraints.
How is fertiliser requirement determined in India? The Hindu Analysis
- The kharif season requires a sizable quantity of fertiliser as it accounts for almost half the year’s production of foodgrains, one-third of pulses and about two-thirds of oilseeds.
- Determination of fertiliser requirement- Every year, before the start of the cropping season, the Department of Agriculture and Farmers Welfare assesses the requirement of fertilisers. The Hindu Analysis
- It then informs the Ministry of Chemical and Fertilisers to ensure the supply.
The requirement varies each month according to demand, which is based on the time of crop sowing, which again varies from region to region. - The government uses the two months (March and April) to ensure the supply of fertilisers for the kharif season.
- As per data, the opening stock of fertiliser available for the kharif season is 125.5 LMT, or 35% of the requirement.
- Domestic production– Theoretically, the opening stock and the expected domestic production would be sufficient to meet the requirement.
- However, the war in Ukraine has disrupted the supply of raw materials that Indian companies import, which is expected to impact domestic production.
How have the disruptions in supply impacted prices? The Hindu Analysis
- There has been a steady increase in prices of raw material as well as logistics and freight costs in recent months.
- The disruption in the logistics chain during Covid has caused the average freight rates for ships to jump up to four times.
- The prices of fertilizers such as DAP and urea, and raw materials such as ammonia and phosphatidic acid, have risen up to 250-300%. The Hindu Analysis
- India depends on imports for potash for manufacturing fertilizers but the sanctions on Belarus and Russia have raised the international prices of potash.
- The government is exploring the option of domestically mining raw materials such as rock phosphate.
How is the government augmenting fertiliser supply? The Hindu Analysis
Price control: In efforts at price control, the government has increased the Nutrients Based Subsidy (NBS) rates for kharif 2022.
The total fertiliser subsidy bill is expected to reach Rs 2.5 lakh crore this financial year, up from Rs 1.62 crore in the revised estimates for the previous fiscal.
Ramping up the production:-India has entered into a C2C (corporation to corporation) supply arrangement with Russian companies for 3 years.
India has made efforts to secure fertiliser supply from alternative sources such as Saudi Arabia and Iran. The Hindu Analysis
For domestic production of urea, the government is focusing on the Matix (West Bengal), Ramagundam (Telangana) and Gorakhpur (UP) plants, and is reviving two other units.
India has also signed a long-term supply deal with Oman to get 10 LMT of urea per year. The Hindu Analysis
Directive to states: The Centre has asked the states to ensure micro-planning of fertiliser movement as per requirement.
It has asked them to promote use of alternative fertilisers such as nano urea, and to take strict action against diversion, hoarding and black marketing of fertilisers.
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Plutus IAS Current Affairs Eng Med 6th June
Plutus IAS Current Affairs Team Member
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