Lok Sabha Question No. 1852 (UNSTARRED), answered on 2024-08-02
Subject: Production of DAP Fertilizer
Ministry: CHEMICALS AND FERTILIZERS
Asked by: Shri  Radhakrishna

## GOVERNMENT OF INDIA MINISTRY OF CHEMICALS AND FERTILIZERS

## DEPARTMENT OF FERTILIZERS

## LOK SABHA

UNSTARRED QUESTION NO. 1852 TO BE ANSWERED ON

: 02.08.2024

## PRODUCTION OF DAP FERTILIZER

1852.  SHRI RADHAKRISHNA:

Will the Minister of CHEMICALS AND FERTILIZERS be pleased to state:

- (a) whether  the  Government  has  taken  note  that  the  high  international  prices  of phosphoric  acid  have  affected  the  production  and  supply  of  DAP  Fertilizer  in  the country;
- (b) if so, the details thereof;
- (c) the  steps  taken/proposed  to  be  taken  by  the  Government  to  address  the decreased manufacturing of DAP fertilizer during the year 2024-25 due to increased costs;
- (d) whether  the  Government  is  planning  to  increase  the  subsidy  amount  for manufacturing of DAP to ensure easy availability of fertilizers for farmers; and
- (e) if  so,  the  details  thereof  including  the  proposed  timeline  and  steps  taken  for implementing such an increase in subsidy?

## ANSWER

## THE MINISTER OF STATE IN MINISTRY OF CHEMICALS & FERTILIZERS (SMT. ANUPRIYA PATEL )

(a) & (b):    The trend of India CFR (Cost & Freight Rates) for Phosphoric Acid for last 3 years (in USD/MT) is as under:

| Jul-21   | Aug-21   | Sep-21   | Oct-21   | Nov-21   | Dec-21   | Jan-22   | Feb-22   | Mar-22   |
|----------|----------|----------|----------|----------|----------|----------|----------|----------|
| 1128     | 1160     | 1160     | 1160     | 1330     | 1330     | 1330     | 1330     | 1530     |
| Apr-22   | May-22   | Jun-22   | Jul-22   | Aug-22   | Sep-22   | Oct-22   | Nov-22   | Dec-22   |
| 1530     | 1530     | 1530     | 1715     | 1715     | 1715     | 1310     | 1175     | 1175     |
| Jan-23   | Feb-23   | Mar-23   | Apr-23   | May-23   | Jun-23   | Jul-23   | Aug-23   | Sep-23   |
| 1175     | 1050     | 1050     | 1050     | 990      | 970      | 970      | 874      | 951.3    |
| Oct-23   | Nov-23   | Dec-23   | Jan-24   | Feb-24   | Mar-24   | Apr-24   | May-24   | Jun-24   |
| 985      | 985      | 985      | 985      | 971.4    | 968      | 963      | 948      | 948      |

It may be seen that international prices of phosphoric acid have been volatile. The  production  of  P&K  fertilizers  (including  DAP,  TSP,  Complexes  &  Ammonium Sulphate) is 143.91 LMT (2022-23), 144.82 LMT (2023-24) and 36.5 LMT (2024-25 till 30.06.2024).

(c)  to  (e):    P&K  fertilizers  are  covered  under  Open  General  License  (OGL),  hence companies manufacture or import P&K fertilizers based on the market dynamics.

Further,  Government  has  taken  the  following  steps  for  making  country  self reliant in P&K fertilizers and address availability of any fertilizer including DAP:

(i) Government  has  implemented  Nutrient  Based  Subsidy  (NBS)  scheme  for Phosphatic & Potassic (P&K) fertilizers w.e.f. 1.4.2010. Under NBS scheme, a fixed amount of subsidy, decided on annual/semi-annual basis, is provided on subsidised P&K fertilizers depending on their nutrient content including DAP. Under this scheme, MRP is fixed by fertilizer companies as per market dynamics at reasonable level which is  monitored  by  the  Government.  Thus,  the  P&K  fertilizer  sector  is  a  decontrolled fertilizer sector under the NBS scheme and the companies are free to take initiatives to produce fertilizers as per market dynamics.

(ii) Whenever,  there  is  a  gap  between  demand  and  production  of  fertilizer,  the same is met through import of fertilizers.

(iii) Based  on  examination  of  requests  received,  permission  are  granted  to  the fertilizer companies for increasing their manufacturing capacity which are under NBS and  for  induction  of  new  P&K  companies  &  their  fertilizer  products  including  DAP under  NBS,  with  a  view  to  boost  manufacturing  and  make  country  self-reliant  in fertilizer production.

(iv) In  order  to  ensure  smooth  availability  of  DAP  at  affordable  prices  to  farmers, Government has provided special packages on DAP over and above the NBS subsidy rates  on  need  basis.  Recently,  in  2024-25,  due  to  geo-political  situation,  adversely affecting the viability of procurement  of  DAP  by  the  fertilizer  companies,  the Government has approved One-time special package on DAP beyond the NBS rates on  actual  PoS  (Point  of  Sale)  sale  of  DAP  for  the  period  from  01.04.2024  till 31.12.2024 @ ₹ 3500 per MT to the P&K fertilizer companies to ensure sustainable availability of DAP at affordable prices to the farmers.

********