Rating agency ICRA in its latest report has said that even as there has been an 11 per cent decline in primary fertiliser sales volume during the first four months of FY2021-22, it is likely to improve and expected to be only marginally lower than the previous financial year. It noted that fertiliser sales volumes during the first four months of FY2022 has registered an 11 per cent decline, given the large base effect of FY21 when panic buying by farmers amid covid-19 pandemic had led to strong growth of 15 per cent y-o-y in H1 FY21. However, it said the sales volume declined in H2 FY21 due to inventory destocking at the farmer's end.
According to the report, the sowing levels in current Kharif season are marginally lower and the fertiliser intensity is also expected to remain stable. Also, it said the fertiliser availability remains adequate for the ongoing Kharif season and the government is making several efforts to ensure adequate availability for the upcoming rabi season. Thus, it said overall fertiliser sales volumes for FY22 are not expected to witness a sharp decline.
The report further said that as for the fertiliser production volumes, they have largely remained stable in four months of FY22 compared to 4M FY21, whereas imports have declined by 16 per cent. The combined, both production and import, volumes have declined by only 6 per cent in the period under review, whereas the retail sales have declined by 11 per cent, indicating availability of fertiliser inventory with the fertiliser companies.
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