Looming fertilizer shortage

News: The Ukraine war has disrupted the supplies of fertilisers in the international market. It could impact India too, as it depends heavily on imports for meeting their burgeoning requirement of fertilizers, For example, India’s import dependence is about 25% for urea, nearly 90% for phosphates, and 100% for potash.  

Why the supplies of fertilisers have shrunk?

It is due to interruption from the war-hit Black Sea region as well as reduction in exports by many European countries and China. For example, Russia, Belarus and Ukraine meet a sizeable part of India’s plant nutrients requirement, especially that of DAP and MOP. 

What is the likely impact on India?

Inevitable surge in fertiliser subsidy: The subsidy bill is bound to outstrip the budget amount of Rs 1.05 trillion for 2022-23 by a huge margin if the government intends to shield the farmers against the high cost of imported fertilisers by raising the price discount (subsidy) on decontrolled phosphoric, potassic and mixed fertilisers 

Any decline in fertiliser use is bound to impact the crop yields in the next season. It may affect farmers’ income, push up prices of agricultural commodities, fuel inflation and result in the black marketing of fertilizers in several states.  

Exploring other markets: Many private importers have already begun exploring possibilities of buying the stuff from Canada and other countries. 

What measures have been taken by India? 

The government invoked the Fertiliser Control Order to penalise hoarders and others indulging in malpractices,  

The local output of urea is likely to improve due to revival of the defunct fertiliser plants at Ramagundam, Sindhri, Barauni and Gorakhpur. But the same cannot be said about phosphatic and potassic fertilisers. 

What is the way forward?

Discovery of some phosphate deposits: It has been found in different parts of the country, notably Rajasthan, Central peninsula, Hirapur area in Madhya Pradesh, and Cuddapah basin in Andhra Pradesh.  

India needs to intensify its ongoing efforts to become self-sufficient in urea and explore means to reduce import dependence on phosphatic and potassic fertilisers.  

Source: The Post is based on an article “Looming fertilizer shortage” published in the Business Standard on 16th Mar 22.