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Fertiliser sales likely to grow 10-15% in FY21: Ind-Ra

01 Sep 2020 Evaluate

India Ratings and Research (Ind-Ra) in its latest report has said that India's fertiliser sales are likely to grow in the range of 10-15 percent in the current fiscal year (FY21) as compared to last financial year, supported by the increase in 1H FY21 sales. It noted that sales increased in 1H due to increased sowing and acreage in the ongoing kharif season, better labour availability, favourable monsoon prospects for the upcoming rabi season, increase in reservoir levels across key fertiliser consumption areas and better fund availability with farmers.

However, the report said the momentum seen in first half of the fiscal is likely to moderate during the second half. It pointed out that the momentum witnessed in fertiliser sales so far in 1H (first half) FY21 is unlikely to continue despite healthy water reservoir levels and better monsoon prospects, owing to the likelihood of increase in the COVID-19 spread to rural areas and higher systematic inventory. Besides, it said India's monthly fertiliser sales have spiked on a year-on-year basis since the lockdown came into effect at the end of March. It added that fertiliser volumes sold during April-July 2020 were 57 percent higher at 22.2 million tonnes (mmt).

According to the report, fertiliser sales surged during the lockdown as the government identified agriculture as essential sector and increased its spending on the sector and rural development by 126 per cent to Rs 1,24,700 crore during the first quarter of FY21. The spending was increased by various means such as better minimum support prices (MSP) for key products harvested during 4QFY20-1QFY21, higher procurement of key rabi crops, timely payments of rabi crops as well as various fund transfer schemes.

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