The Bharatiya Janata Party (BJP) has a new concern: the rebound in global prices of fertilizers and their raw materials.
Last month, India's CIF price of imported urea soared from $318-320 to $395-410 per ton, before falling to $285-290 at the end of June.
The same was true for diammonium phosphate, whose CIF price was $435-440 per ton in mid-July. Two weeks ago, the price rose to $480 and is currently $560 per ton.
The CIF price of ammonia, which is used in domestic diammonium phosphate production, has also climbed to $400-405 per ton from $300-310 per ton in the past month.
An insider said, "The trend of international prices falling back from the highs seen after the Russia-Ukraine conflict in February last year has been clearly reversed."
Import prices for diammonium phosphate peaked at $950-$960 per ton in July 2022; urea at $900-$1,000 per ton in November 2021 to January of the following year; ammonia at $1,575 in April 2022, and phosphoric acid at $1,715 from July to September 2022.
The inside said, "If the current trend continues, even the import price of $850 per ton set with global suppliers in July to September will have to be reset in the next quarter."
Meanwhile, the price of potassium chloride remains quite low at $319 per ton, falling from $590 per ton to $422 in March and April to June 2023. Russia is currently keeping the global potash market adequately supplied.
Rising fertilizer prices have created a huge financial problem for the Indian government.
The union budget for 2023-24 allocates Rs 1.75 trillion for fertilizer subsidies; of this, Rs 45,113 crore was used in the April-June quarter as global prices fell, with the prospect of further savings in the coming months.
These calculations may now have to be revisited. In the year leading up to the national elections, which are expected to be held in April-May 2024, the government will have no choice but to provide more funds for the fertilizer subsidy, which in 2022-23 amounted to Rs. 215,139.35 crore.
Attention: The above price information is for commercial reference only due to the diversity of information collected, and Kelewell is not responsible for the authenticity of the data.
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