Govt likely to allow 300,000 tonnes of urea for export

by AMER SIAL

The government is likely to allow urea manufacturers to export 300,000 tonnes of urea out of total estimated surplus of 800,000 of urea fertilisers during the current Rabi season.

An informed source said the summary is already cleared from the inter-ministerial committee. No ministry opposed the export of urea. Measures should be taken to avoid a domestic price hike and shortage, said a source.

The Ministry of Food Security and Research pointed out that export of urea should not lead to export of the subsidised fertilisers available with the dealers to avoid a price hike. It supported the proposal subject to the condition that priority for exports to be given to the plants which are manufacturing urea by using the RLNG.

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The commission suggested that the subsidy of Rs 570/50 Kg bag provided as feedstock to the urea plants may be recovered from exports. The finance ministry also supported the proposal to export 0.3 million tonnes of urea subject to the conditions that export would not affect the domestic price and there would be no subsidy on the said export.

Fertiliser companies are seeking export to maximise their profits by avoiding the glut in the market. The improvements in gas supply have increased urea production but hike in domestic prices have declined the fertiliser usage.

An inter-ministerial Fertilizer Review Committee (FRC) was informed that there were 1.73 million tonnes of urea stocks available with the fertiliser companies including 0.27 MT of imported urea available with National Fertilizer Marketing Limited (NFML).

According to the estimates, the production up to March 2017 would be around 2.58 MT, which makes the total availability of urea around 4.32 MT including 1.74 MT stocks and 2.58 MT fresh productions.

The expected off-take for the Rabi season, after factoring in 11 percent excess demand owing to reduction in urea prices, would be around 3.3 MT. The total surplus urea fertiliser would be around one million tonnes include 4.32 MT available minus 3.3 MT off take. After maintaining a strategic reserve of 200,000 tonnes, around 0.8 MT in surplus will be available for export up to June 30, 2017.

The estimated production during April-June period is assessed at 1.5 MT, whereas the urea off-take during early Kharif is estimated to be around 1.1 MT.

 

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