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AGRIBUSINESS MANAGEMENT INSTITUTE Sarika P Kokate Reg no Guide : Date:-10-04-2012 Synopsis

Fertilizer Industry in India


Objective:
To Study the growth & trends of Chemical Fertilizer Industry in India. To know the initiatives and policies by the Indian government in Chemical Fertilizer Industry

Introduction:
Fertilizer is a unique industry in which farmers are consumer. Indian economy is mainly dependent upon the agriculture. To develop the Fertilizer sector and the Indian economy, emphasis should be given in upliftment of the rural infrastructure. In year 1906, the first Single Super Phosphate manufacturing unit was established with the capacity of 6000 lakh MT at Ranipet (Chennai). The Fertilizer &Chemical Travancore of India Ltd. (FACT) at Cochin in Kerala and the Fertilizers Corporation of India (FCI) in Sindri (Jharkhand) was established in year 1944. In 1947, Emphasis was given for improving domestic production of fertilizers. In 1966, fertilizer sector was dependent mainly on Inclusion of Pvt trade in marketing of fertilizers and Fertilizer Movement Control Order Enacted. In year 1977, Retention Price & Subsidy Scheme were introduces mainly for Urea.
(Sources: Dept. Of Fertilizer,GOI)

Current Status:
World Scenario:
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World fertilizer consumption fall by 5% in 2008/09 registered in all the regions like South Asia and Eastern Europe and Central Asia (EECA) and Africa. The leading four exporters (Morocco, Jordan, China and the Russian Federation) of fertilizer. Africa is a major exporter of phosphate fertilizer but potash. USA is the largest producer of fertilizer . China is next to USA and Morocco is the third largest producer of Fertilizers. About 69% of growth will take place in Asia and 19% in America for Fertilizer production.
(Source: International Fertilizer Industry Association 2008-09)

import

India Scenario:
India the 3rd largest fertilizer CHINA and USA. consumer in the world after

Paradeep Phosphate Limited of Orissa state is a first Enterprise for producing Phosphate Fertilizer in India. In India the use of NPK is assumed to be in ratio of 4:2:1. At Present UREA is the main fertilizer with consumption of 60 % of total fertilizer consumption in country. Maximum producer state for fertilizer in India is West Bengal.
(Sources: Dept. Of Fertilizer, ANNUAL REPORT, 2009-10 )

Fertilizer use of crop Production:

Rice Sugarcane

Wheat Cotton

Food Grains Pulses Vegetables Fruits

Oil Seeds Others

3% 4% 5%

2% 5%

37% 9% 3% 8% 24%

(Sources: Dept. Of Fertilizer,GOI)

Growth:
As on 2011, the country has an installed capacity of 121lakh MT of nitrogen, 45.22 lakh MT of Phosphate. At present, there are 64 large size fertilizer units in the country, manufacturing a wide range of nitrogenous and phosphatic/complex fertilizers. Of these. 39 units produce urea, 19 units produce Diammonium Phosphate (DAP) and complex fertilizers, 7 units produce low analysis straight nitrogenous fertilizers, 9 of the above units produce ammonium sulphate as a by-product. Besides, about 79 small and medium scale units producing single super phosphate (SSP). (Department of fertilizer, GOI.)

MAJOR PLAYERS:
A) Public sector companies
Fertilizer Corporation of India Limited (FCIL) Hindustan Fertilizer Corporation Limited (HFC) Pyrites, Phosphates & Chemicals Limited

Rashtriya Chemicals and Fertilizers Limited (RCF) National Fertilizers Limited (NFL) Projects &Development India Limited (PDIL) The Fertilizers and Chemicals Travancore Limited (FACT) Madras Fertilizers Limited (MFL) FCI Aravali Gypsum & Minerals India Limited, Jodhpur

B) Private fertilizer Companies The Scientific Fertilizer Co Pvt Ltd Coromandel Fertilizers Deepak Fertilizers and Petrochemicals Corporation Limited Apratim International Aries AgroVet Devidayal Agro Chemicals Gujarat State Fertilizers &Chemicals Limited Tata Chemicals Limited Chambal Fertilizers Nagarjuna Fertilizers and chemicals limited Godavari Fertilizers and Chemicals limited Zuari Industries limited

C) CO-OPERATIVE SECTOR IFFCO KRIBHCO

Sector wise, Nutrient wise installed capacity of fertilizer manufacturing units (Table 01):
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Sr. No.

Sector

Capacity (Lakh MT) N P 4.33 17.13 35.13 56.59 N 29

Percentage Share P 7.65 30.27 62.08 100

1. 2. 3.

Public sector Cooperative sector Private sector Total

34.98 31.69 53.94 120.61

26.27 44.73 100

Source:-Department of fertilizer, GOI.

MARKET SHARE OF MAJOR PLAYER (2009-10):


IFFCO
4% 5% 6% 7% 15% 15% 20%

NFL RCF CHAMBAL KRIBHCO NFCL TCL

8%

10%

10%

INDO GULF

Source:-Department of fertilizer, GOI.

Total Production of Fertilizer in India:


Total Production of Fertilizer in India increases from 119.60 lakh M.T. of Nitrogen and 53.60 lakh M.T. of Phosphorus in march 2004 to 120.61 lakh M.T. of Nitrogen and 56.59 lakh MT of Phosphorus uptil 2010. Percentage increase in Nitrogen Fertilizer Production is 99.16% and for Phosphorus is 94.7%. (Source: Department of Fertilizers.GOI)

140.00 120.00
LAKH TONNES

100.00 80.00 60.00 40.00 20.00 0.00


2005-06 2006-07 2007-08 YEAR 2008-09 2009-10 2010-11 N P

Consumption Of fertilizer In India: Annual consumption of fertilizers in nutrient terms (N, P & K) increase from 197 lakh MT in 2005-06 to 280 lakh MT in 2010-11 . Per hectare consumption of fertilizer increases from Less than 1 Kg in 1951-52 to 128.60 g in 2008-09 is approx. (Source: Department of Fertilizers.GOI)

180.00 160.00 140.00 LAKH TONNES 120.00 100.00 80.00 60.00 40.00 20.00 0.00
2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

N P K

YEAR

Import Of Fertilizer in India:


50.00 45.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

Lakh Tonnes

N P K

(Source: Department of Fertilizers.GOI)

State-Wise Fertilizer consumption in India:


States Punjab Andhra Pradesh Tamilnadu Haryana Consumption ( in Kg/ha) 212.7 208.2 205.82 190.9

(Source: Annual report 2010, Ministry of chemicals and Fertilizer, GOI)


3500.00

3000.00

THOUSAND TONNES

2500.00

2000.00

Import In

N P K

1500.00

1000.00

500.00

0.00

UP

TN

MP

MH

KA

GUJ

AP

(Source: Department of Fertilizers.GOI)

Sale Point Of Fertilizer :Table 03:-

(Sources: FAI, 2009 )

Government Policies and Approaches:


Fertilizer Subsidy: Making available fertilizers to farmers at affordable prices and to promote balanced application of three main fertilizer nutrients viz. nitrogen, phosphorus and potash. Subsidy Released in year 2010 in Urea is Rs 25258 (in crores) and on indigenous P+K is Rs. 15447 (In crores) and On Imported (P+K) is Rs. 16351 (in crores). On Urea Subsidy Increases by 31.19 % And on Indigenous P+K increases by 16.10%

Fertilizer subsidy in crores :Year 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 Urea 8509 10986 11749 15354 23204 33901 25258 24340 Total ( P+K) 3326 5142 6550 10598 17134 32654 31798 28500

(Sources: Annual report 2010, Ministry of chemicals and Fertilizer, GOI ) 8

NUTRIENT BASED SUBSIDY :


NBS policy on decontrolled Phosphoric and Potassic fertilizer w.e.f 1stApril ,2010. Fix subsidy on N,P,K,S for 2010-11 Subsidy is fixed based on the import parity price adjusted for MRP wherein 'P' is based on DAP, 'N' based on Urea and 'K' based on Potash and 'S' based on Sulphur. Additional per ton subsidy for subsidized fertilizer carrying other secondary nutrients and micronutrients.eg in Zn,Boron. 10% increase in price of urea (Rs 4830 to Rs 5310)

Per MT NBS for Major fertilizers in India


Sr No. 1 2 3 4 5 6 7 S.N. Major Fertilizers DAP MOP SSP Ammonium Sulphate NP (20-20-0) NPK (10-26-26) NPK (19-19-19) Nutrients NBS (Rs. Per Kg of Nutrient ) 1 2 3 4 N P K S 24.00 21.80 24 1.677 NBS (Rs Per MT) 19,763 16,054 5,359 5,979 11,898 18,080 16,387

(Sources: FAI, May 2011 )

Source: ministry of fertilizer,GOI

Fertilizer regulations:
Fertilizer control order Compulsory registration of fertilizer makers, importers and sellers. Specifications for all fertilizers produced, imported or sold in India. A set of regulations on the manufacture of fertilizer mixtures. Packing and labelling of fertilizer bags. Appointment of enforcement agencies and creation of quality control laboratories. Banning of the manufacture or import and sale of nonstandard, spurious or adulterated fertilizers. Source: ministry of chemical fertilizer,GOI Latest developments

It is forecasted that the demand for fertilizers in 2011-12 is going to be around 35.5 MM tons. The leading role is to be played by Gujarat in fertilizer production. Many concepts have been developed to carry out research and development / basic research work by mutual understanding between industry and academic institutions, and even there is support from the Department of Fertilizers to sponsor research and development projects through the Indian Institutes of Technology, Delhi and Kharagpur under the Science and even other major institutions in the country The fertilizer plant operators are now in the position to absorb and assimilate the latest technological developments, incorporating environmental friendly process technologies, and are in a position to operate and maintain the plants at their optimum levels without any foreign assistance and on international standards in terms of capacity utilization, specific energy consumption & pollution standards. Today India has developed expertise for fabrication and supply of major and critical equipment such as high-pressure vessels, static and rotating equipment, Distributed Control System (DCS), heat exchangers and hydrolyser for fertilizer projects. Fertilizer serves as the key ingredient for the food security of the country, by increasing the production and productivity of the soil. The Industry has set the domestic food grain production
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target at 320 million tones by 2011-12 from the present production of 210 million tones. This target would only be achieved by higher productivity through improved farming practices, expansion of irrigation, better seeds and extensive and balanced use of fertilizers. (Source : www.Indianmirror.com)

Promotional activity of fertilizer industry:


Indo gulf fertiliser Shaktiman Krishi Sewa Kendras Shaktiman Krishi Swayan Rozgar Kendras KRIBHCO Educational programme Rural development programme Mobile soil testing programme Krishak Bharti Sewa Kendras Field Demonstration MANGALORE CHEMICAL AND FERTILIZERS LTD.(MCFL) Field visit Intensive Consumer Contact Programme Crop literature Audio Visual van
(Source: The book THE AGRIBUSINESS , Mukesh pandey,Deepali Tewari,pp-631)

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Conclusion:
For potash fertilizers India fully depends on import. Fertilizer consumption is increasing day by day. NBS policy is helping to minimize Govt. burden & to create win win situation for farmer & industry. Decontrol of N,P,K and the introduction of a nutrient-based subsidy (NBS) mechanism as a positive step towards market-linked farm gate pricing.

REFERANCES:
Department of fertilizer, GOI. The book THE AGRIBUSINESS , Mukesh pandey,Deepali Tewari,pp631. The Economic time dated on 05 April 2012 Title :10% hike urea prices. Fertilizer association of India www.indianmirror.com.

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