Published on January 19, 2015

At the cost of the government and farmers a widespread shortage of urea has been created where few fertiliser dealers are benefiting. Moreover as per the industry experts, for few dealers and traders who have indulged in black marketing, this shortage of urea have proved to be a boon and in compare to the official prices of urea, the prices of urea are been sold at a double rate depending on the market condition. And at the same time as the government is laden with a massive subsidy payout, the creating of money is thus making rumpus for a handful of dealers and traders.

According to the researched report, the urea imports of India as per the fertiliser import data for April-December, 2014 had showed a fall of 4.3% year-on-year to 6.3 million tons, however in April-October, 2014 the shortfall of urea was seen high by 35% amid a squirt in imports in the month of November and December.

Moreover in order to prolong the subsidising Naphtha-based urea production, the domestic production of urea has been hampered by the unwillingness of the government. As per the industry experts, since the government has stopped paying the subsidy to Naphtha-based urea plants, major Indian fertiliser manufacturer such as SPIC, Mangalore Chemicals and Madras Fertiliser have taken its plants off-stream for past three months. And hence this is bound to affect the production of domestic urea.

Furthermore as per the sources, as Prime Minister Narendra Modi budges to check subsidy costs and engrave wasteful use of the crop nutrient, India is taking into consideration to remove price controls on urea and fragmenting an import duty of 5%. Nevertheless as per the researched report, over past few decades the subsidy cost of fertiliser had quadrupled as the previous government had kept the prices of urea below the cost of production due to dread of repercussion from the dominant farm lobby. However in India the usage of urea is widely used in fertiliser.