September 2022 Annual Review of Fertilizer Production and Consumption 2021-22 893

ANNUAL REVIEW OF
FERTILIZER PRODUCTION AND CONSUMPTION 2021-22

EXECUTIVE SUMMARY
The year 2021-22 began with reasonable inventory of recorded a sharp increase of 26.6% during the period.
fertilizers which facilitated positioning of fertilizers Total consumption of fertilizer products 63.94 million
for sowing operations before the onset of cropping MT during 2021-22 showed a decline of 5.4% over 2020-
season. Southwest monsoon during the past three 21.
consecutive years has been very good. Overall normal
rainfall facilitated good coverage under kharif and rabi All-India NPK use ratio widened from 6.5:2.8:1 during
crops during 2021-22. Availability of fertilizers from 2020-21 to 7.7:3.1:1 during 2021-22.
opening stock, domestic production and imports was Per hectare use of total nutrients (N+P 2 O 5 +K 2 O)
adequate to take care of the demand for 2021-22. This reduced from 160.1 kg in 2020-21 to 146.7 kg in 2021-
has resulted higher agricultural production during 22.
the year.
FERTILIZER INVENTORY
SOUTHWEST MONSOON
Reasonable inventory at the beginning of the year
Southwest monsoon 2021 arrived in Kerala on 3rd June, facilitated positioning of fertilizers for sowing
2021 after a delay of two days. Overall rainfall from operations before the onset of cropping season.
1st June to 30th September, 2021 was 99% of long period Inventory of urea at various points excluding stock at
average (LPA). Out of 36 meteorological sub-divisions, the dealers’ point was more than 1.1 million MT at the
30 sub-divisions received normal to excess rains and beginning of the year. Similarly, inventory of DAP and
remaining 6 sub-divisions received deficient rains NP/NPKs together was about 2.0 million MT, SSP 0.47
during the period. million MT and MOP 0.76 million MT.
Water storage position in major reservoirs was PRODUCTION OF FERTILIZERS
comfortable in 2021. Live storage in 130 reservoirs at
the end of kharif 2021 was 138.33 BCM as against 150.19 Fertilizer production at 18.58 million MT (N+P 2O 5)
BCM during the corresponding period in the previous during 2021-22 witnessed a marginal increase of 0.5%
year. This was 92% of the last year and 104% of the over 2020-21. While production of nitrogen (N)
normal storage. increased marginally by 0.9% to 13.87 million MT,
phosphate (P2O5) declined by 0.5% to 4.71 million MT
FERTILIZER CONSUMPTION in 2021-22.
Total fertilizer nutrient consumption (N+P 2O 5+K 2O) In terms of products, production of urea at 25.08
was estimated at 29.80 million metric tonnes (million million MT, DAP at 4.22 million MT and SSP at 5.35
MT) as against 32.54 million MT in the previous year million MT during 2021-22 marked increase of 1.9%,
registering a negative growth of 8.4%. The 11.9% and 8.9%, respectively, over 2020-21. However,
consumption of N, P2O5 and K2O at 19.44 million MT, production of NP/NPK complex fertilizers at 8.31
7.83 million MT and 2.53 million MT during 2021-22 million MT witnessed a sharp decline of 10.9% during
declined by 4.7%, 12.8% and 19.8%, respectively, over 2021-22.
2020-21.
GAS AVAILABILITY
In terms of products, consumption of urea at 34.18
million MT, DAP at 9.27 million MT, MOP at 2.46 Supply of domestic gas to fertilizer plants has
million MT and NP/NPK complex fertilizers at 11.48 dwindled gradually over the years. This has made
million MT during 2021-22 witnessed decline of 2.5%, fertilizer plants more and more dependent on imported
22.2%, 28.3% and 2.8%, respectively, over 2020-21. LNG. Supply of domestic gas declined further from
However, consumption of SSP at 5.68 million MT 10.2 MMSCMD in 2020-21 to 8.0 MMSCMD in 2021-22.

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894 Indian Journal of Fertilisers 18 (9)

Thus domestic gas constituted only 17.7% of total gas 6.5% and 10.3%, respectively, during 2021-22 over
consumed during the year. 2020-21. However, production of cotton is estimated
to decline by 11.5% during the same period
IMPORT OF FERTILIZERS
POLICY AND PAYMENT ISSUES
Except DAP, import of major fertilizers declined during
2021-22. Import of urea at 9.14 million MT, MOP at Payments of differential in minimum fixed cost
2.46 million MT and NP/NPK complex fertilizers at resulting after implementation of Modified NPS-III
1.17 million MT during 2021-22 declined by 7.1%, (Rs.1635 – Rs.1285) on production beyond Re-assessed
41.8% and 15.8%, respectively, over 2020-21. However, Capacity for the period 2014-15 onwards were cleared
import of DAP at 5.46 million MT recorded an increase during the year.
of 11.9% during the period.
Policy for minimum fixed cost and updation of fixed
RETAIL PRICES OF FERTILIZERS cost for urea units remained under consideration of
the Government. The Committee on urea policy
The basic retail price of urea remained unchanged at submitted the Report to the DOF. Major
Rs.5360 per tonne since November 2012. W.e.f. 25 th recommendations include amendments in existing
May, 2015, Government of India (GOI) made it policies like approval of minimum fixed cost and
mandatory for all indigenous urea manufacturers to updation of fixed cost and also reforms like
produce 100% neem coated urea of their total urea implementation of NBS Policy for urea, DBT in true
production. The same policy is applied for imported sense and augmenting allocation of domestic natural
urea at the port. GOI allowed the manufacturers / gas. Deliberations of a Committee constituted by DOF
importers to charge 5% extra on the MRP of urea. to updation of fixed cost for urea units are continuing.
Therefore, the retail price of neem coated urea (excluding
tax) works out to Rs. 5628 per tonne. Budget allocation for 2021-22 was increased
significantly to Rs. 1,40,122 crore from the level of
Government has made it mandatory to resize urea original BE of Rs. 79, 530 crore. This facilitated timely
bag from 50 kg to 45 kg. Department of Agriculture, payment of DBT subsidy. However, annual escalation
Cooperation and Farmers Welfare notified price per due to increase in gas cost for 2020-21 and 2021-22
bag of urea of 45 kg at Rs. 242/- w.e.f. 1st March 2018 remained pending for urea units.
from Rs. 268/- per bag of 50 kg earlier.
Rates of subsidy under NBS Policy were increased
The retail prices of P & K fertilizers covered under significantly for kharif 2021 and rabi 2021-22 to insulate
NBS scheme are market driven and announced by the farmers from abnormal increase in international
fertilizer companies from time to time. prices of fertilizers and raw materials. Additional
subsidy on DAP and 3 important grades of NP/NPKs
PRODUCTION OF MAJOR CROPS were allowed during rabi 2021-22. Government is also
Total production of food grains is estimated to increase considering to compensate the suppliers of P&K
from 310.7 million MT in 2020-21 to 315.7 million MT fertilizers for the losses incurred due to volatile
in 2021-22 representing a growth of 1.6%. Among food international markets and sharp depreciation in rupee
vis-à-vis US dollar for the period 25th October, 2021 to
grain crops, production of rice is estimated to increase
31st March, 2022.
by 4.8% and pulses by 8.8% during 2021-22 over 2020-
21. However, production of wheat and coarse cereals Mixture/customized fertilizer manufacturers were
is estimated to decline by 2.5% and 0.8%, respectively, made eligible for 25% of their total requirement of
during the period. Production of oilseeds, sugarcane subsidized fertilizers authorized by state
and jute & mesta is estimated to increase by 4.9%, governments.

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September 2022 Annual Review of Fertilizer Production and Consumption 2021-22 895

OUTLOOK FOR 2022-23

POLICY AND CROP SITUATION

PAYMENT ISSUES Monsoon became active over most parts of India
during July 2022. However, uneven distribution of
rains during the period has created concerns over
Subsidy rates for kharif 2022 under NBS Policy were adverse impact on kharif crops. As per the available
also increased significantly to protect farmers from information, total area sown under all kharif crops
steep increase in cost of fertilizers. But, rate of was 104.51 million hectares (million ha) as on 26 th
subsidy on SSP was not increased. DOF notified August, 2022 compared to 106.19 million ha during
primary and secondary freight rates in April 2022 the corresponding period in the previous year. This
was 1.6% lower than the corresponding period in
till 2020-21 which were pending after 2016-17. But,
the previous year.
updation of primary road freight rates for P&K
fertilizers remained pending.
FERTILIZER SALE
Additional budget allocation of Rs. 1,10,000 crore
has been announced for 2022-23 over and above the
Uneven distribution of monsoon rains and decline
budget estimate of Rs. 1,05,222 crores. in sown area affected demand of some products
during April/July 2022 over April/July 2021. Sale of
urea at 10.42 million MT and DAP at 3.13 million
SOUTH-WEST MONSOON MT during April/July 2022 registered increase of
2.2% and 15.1%, respectively, over April/July 2021.
However, sale of NP/NPKs at 2.49 million MT, SSP
at 1.82 and MOP (for direct application) at 0.40
Onset of Southwest monsoon 2022 was advanced
million MT witnessed decline of 32.4%, 4.0% and
by 3 days. However, rainfall during June 2022 was 55.5%, respectively, during the period.
8% below LPA but in July and August, it was 17%
a n d 3 % a b o v e L PA . I M D p r e d i c t e d n o r m a l PROSPECTS OF
rainfall during Southwest monsoon 2022. The FERTILIZER CONSUMPTION
cumulative rainfall during 1 st June to 31 st August,
2022 was 6 per cent above the LPA. The country Overall Southwest monsoon ( June-September) 2022
received 743.8 mm rains as against 700.7 mm of has been uneven but overall normal so far. There
normal rains during the period. Out of 36 may be uneven growth in consumption of
meteorological sub-divisions, 30 constituting different fertilizers due to lower cropped area for
some crops for kharif 2022. Normal Southwest
83% of the total area of the country received
monsoon is likely to leave good moisture contents
excess/normal rains. Out of 703 reported districts,
in the soil for ensuing rabi crop season. Water
68% districts received normal to excess rains availability in the reservoirs at the end of kharif
during the period. season is also likely to be comfortable. Continuing
increase in international prices of fertilizers and
Total live storage available in 143 reservoirs was
raw materials remains the challenge for
144.97 BCM as on 25 th August, 2022 as against availability of fertilizers at reasonable prices.
112.69 BCM on the same date in the previous Overall growth in consumption of fertilizers for
year. Current year ’s storage is 129% of the last the full year 2022-23 is expected to remain a fairly
year ’s storage and 125% of the normal storage. good over the previous year.

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