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Cost of imported urea gets cheaper by 20% in Q1 of 2013-14

26 Jul 2013 Evaluate

During the first quarter of this fiscal, the country has imported urea at around 20% cheaper price as compared with the average cost for last financial year. If domestic demand of urea remains constant then this cheaper imports of urea could lead to lower subsidy burden on the government. Currently farmers purchase urea at maximum retail price (MRP) of Rs 5,360 per tonne. The difference between the MRP and production/imported cost is paid by the government to producers.

For the current fiscal, the government has lowered the fertilizer subsidy marginally to Rs 65,971.50 crore. In the April-June quarter of this fiscal, India has imported about 11.09 lakh tonnes (LT) of urea, up by nearly 50% from the year-ago period. The imported cost of urea had reached as high as $535-540 per tonne during last fiscal. The average cost does not include imports of urea from OMIFCO in Oman which costs around $170-$175 per tonne.

In the entire 2012-13 fiscal, the country imported 80.44 LT of urea while the domestic production of urea is about 220 LT. The country imports urea mainly by the three canalising agencies - Indian Potash, MMTC and STC.

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