Published on April 7, 2014

With the beginning of new financial term the new policies and decisions are being taken in the agro and fertilizer industries. In a recent move Election Commission has given its consent to government’s decision to increase the fixed cost of Urea to Rs.350 per tonne along with condition that there will be no hike in the selling prices for urea. This move would lead to an increase in subsidy by about Rs.900 crore. Raise in the fixed cost will eventually thrust the cost of production but on other side the selling prices for urea will remain fixed at Rs. 5360 per tonne.

The other major decision was taken for the Urea plants. The plants which are more than 30 years old will be provided with additional grant of Rs.150 per tonne. At present Indian farmers need 30 million tonnes of Urea every year whereas the annual urea production capacity in the country is stagnant to 22 million tonnes resulting into a gap of 8 million tonnes which is met through imports. To reduce this gap and decrease the dependency on imports government is boosting the local manufacturers to improve their technology and capacity.

Experts from the chemical trading confer that demand for chemicals which are widely used in manufacturing of pesticides and insecticides are likely to increase. Solvents are such category of chemicals which are widely used in this industry. At present the prices of solvents like C9, Mixed Xylene and Toluene were traded on their lowest rates. Now the prices will witness a fair chance of positive trend and will increase in the upcoming weeks. Even government has asked its states to make a realistic assessment of the fertilizer requirement for the upcoming Kharif season.