Price and supply volatilities in urea, di-ammonium phosphate (DAP) and muriate of potash (MOP) is driving fertiliser firms to think beyond these traditional commodity nutrients and focus more on high-value, low-volume products.
One segment drawing companies' attention is water-soluble fertilisers (WSF). These are nutrients administered to plants in liquid form, unlike urea, DAP or MOP that are applied as solid granules, prills or crystals. Although the latter can also be made into solutions, they are not 100 per cent water-soluble and leave behind sediments that do not get utilised by the plant.
Dr G. Ravi Prasad, President (Marketing) of Coromandel International Ltd (CIL), reckons the Indian market for WSFs currently at 50,000 tonnes or worth around Rs 400 crore, which could quadruple in the next 4-5 years. “My own company is marketing 10,000 tonnes, which may go up to 35,000 tonnes two years from now,” he claimed.
WSFs cover products of various N:P:K:S (nitrogen:phosphorous:potassium:sulphur) compositions like 19:19:19:0, potassium nitrate (13:0:45:0), sulphate of potash (0:0:50:18), urea phosphate (17:44:0:0), mono ammonium phosphate (11:61:0:0) and mono potassium phosphate (0:52:34:0).
Company plans
CIL hopes to commission, by October, a 15,000 tonnes per annum (tpa) unit for manufacturing 19:19:19:0 WSF at Kakinada, Andhra Pradesh through a 50:50 joint venture with SQM of Chile. It also imports potassium nitrate from the $1.8 billion Santiago-based company, which controls half of the estimated 1.5 million tonne global market for this specialty plant nutrient.
Zuari Industries Ltd (ZIL), Indian Farmers Fertiliser Cooperative (Iffco), Rashtriya Chemicals & Fertilisers (RCF) and Nagarjuna Fertilisers & Chemicals (NFCL) are the other major players seeking to expand their WSF portfolio.
“In 2010-11, we sold 8,000 tonnes. Our target for this fiscal is 11,000 tonnes and 20,000 tonnes in 2012-13,” said Mr Suresh Krishnan, Managing Director of ZIL, which has a 50:50 venture with Israel's Rotem Amfert Negev to produce 24,000 tpa of 19:19:19:0 at Baramati, Maharashtra. RCF has its own 19:19:19:0 manufacturing facility with a smaller 3, 000 tpa capacity.
Iffco's 16, 500 tpa WSF plant at Kandla in Gujarat makes urea phosphate. In 2010-11, the first year of commercialization, it produced 2,385 tonnes, with 15,000 tonnes targeted for this fiscal. “We are looking at manufacturing another WSF, 18:18:18:0, once the product gets the Central Fertiliser Committee's approval,” Mr Arabinda Roy, Marketing Director of Iffco, told Business Line .
NFCL currently sells over 9,000 tonnes of WSFs by importing its requirements from Haifa Chemicals of Israel.
The main impediment to WSF sales is prices. They range from Rs 60-65 a kg for urea phosphate and sulphate of potash to Rs 78-80 for 19:19:19:0 and Rs 100 for potassium nitrate , as opposed to Rs 5.36 a kg for urea, Rs 12 for DAP and Rs 6.30 for MOP.
Value for money?
What, however, works in the favour of WSFs is their nutrient use efficiency. MOP has 60 per cent potassium content, of which only 45-50 per cent gets used by the plant. Potassium nitrate, by contrast, contains 45 per cent potassium and 13 per cent nitrate. But the uptake of these nutrients through this fertiliser, of which one kg is dissolved in 100 litres water and administered through drip irrigation or as foliar spray, is 90-95 per cent.
“From a 50-kg bag of MOP, not even 15 kg of potassium actually gets absorbed. The farmer can, instead, opt for five 2-kg sprays of potassium nitrate and obtain better results, as the nutrients are delivered directly to the root zone or through the leaves,” Dr Prasad pointed out.
But then, a bag of MOP costs only Rs 315, compared with Rs 1,000 for 10 kg of potassium nitrate. “The problem can be partially addressed by extending nutrient-based subsidy to WSFs (currently not given). For potassium nitrate alone, this will lower the price by Rs 16 a kg,” he added.
The other big driver for WSF consumption is soaring global prices and supply shortfalls in commodity fertilisers. “Till recently, DAP and MOP were freely available and our farmers did not know the value of nutrient use efficiency. This is slowly changing. I see them interested in our trails showing the huge yield gains in onion, ginger, garlic, potato or turmeric, resulting from foliar application of WSFs at critical stages,” noted Mr Roy.
But these are still early days and “we need to really work with farmers to convince them about WSFs and other specialty nutrients,” admitted Mr Krishnan.