Fertilizers play a vital role in the achievement of self-reliance in food-grain production. The increase in fertilizer consumption has contributed significantly to sustainable production of food grains in the country.
The Indian fertilizer market showed a growth of 22.6% in last 5 years during 2016-2021, however production of fertilisers in India has negligible growth of 3.78% during 2016-2021, resulted more dependency on import of fertilizers, which is increased by 48.22% in FY’ 2020-21 from FY’ 2016-17.
In spite of depending on import for huge quantity of fertilizers, farmers hardly faced any shortage of fertilizers in these 5 years. As, a result the demand of fertilizers has witnessed continuous growth YOY in the past several years. Looking forward, the Indian fertilizer market is expected to grow at a CAGR of 2.91% during 2021-2026 and to touch a level of 70.64 million tons by 2025-26.
Urea Trend in India – Production, Import & Sales
Urea is the major consumed fertilizer in India with the share of 57% of all key fertilizers (Urea, DAP, MOP & NPK). Production of urea increased by just 1.6% in last 5 years that too on account of efficiencies achieved by urea manufacturers. Demand / sales have touched a level of 35.1 million tons in FY’2020-21 with the growth of 18.6% in last 5 years, from a level of 29.6 million tons in FY’ 2016-17.
Imports have risen by 78% during this period, to counter the shortfall in domestic production. Import dependency on urea was 9.8 million tons in FY’ 2020-21 from a level of 5.5 million in FY’ 2016-17. Five large-scale capacity additions (Ramagundam, 3 HURL Plants Gorakhpur, Barauni & Sindri and Matix) are also expected to come on stream in the financial year 2021-22, in India, which will guarantee to decrease imports around 6.35 million tons. In spite of adding additional capacity of these plants, still there will be gap of 3.4 million tons on PAN India level.
DAP Trend in India – Production, Import & Sales
P&K fertilizer comes under the NBS scheme w. e. f. 1 April 2010 and the prices of P&K fertilizers are partially deregulated. The production and imports of P&K fertilizers depends on various factors like demand-supply, international raw material and commodity prices and currency movements.
After Urea & NPK Complex fertilizers, DAP is the major consumed fertilizer in India. According to iFMS data, the sales of DAP fertilizers is increasing in India year over year and touched a level of 10.5 million tons in FY’ 2020-21, with the growth of around 19.3% in last 5 years.
The production of DAP touched 3.8 million tons and registered 13.6% negative growth in the production in last 5 years and import has touched 5.8 million tons with growth of 31.8% in last 5 years.
Production of DAP is continued to be lower side due to many factors. The key challenges for the P&K production are international price fluctuation, raw material price, forex fluctuations, agro-climatic risks and retail price differential of P&K fertilizers, which are still required to address for balance use of nutrients.
NPK Complex Fertilizers Trend in India – Production, Import & Sales
The production of NPK Complex totally depends on the profitability and market realisation compare to DAP. NPK Complex fertilisers ranked second in consumption / sales with a share of 19.6% in major consumed fertilizer (Urea, DAP, MOP & NPK), in India. The Sales / Consumption of NPK Complex fertilizers is increasing in India year over year and touched a level of 12.2 million tons, in FY’ 2020-21, with the growth of 41.8% in last 5 years, as per iFMS data.
The production of NPK complex fertilizers have reached at a level of 10.1 million tons in FY’ 2020-21, with a growth of 18.8% in last 5 years, whereas import of NPK complex fertilizers touched 1.7 million tons, with 240% increase.