Ending apprehension of a subsidy cut after six months of announcing a new sulphur coated urea “Urea Gold”, the government decided to fix its price by reducing the weight of the bag while keeping the same price as conventional urea of ₹266.5 per bag. However, the net weight per bag Urea Gold has been fixed at 40 kg against 45 kg in case of conventional urea, effectively making the new product about ₹30 costlier.
Had the government allowed the same 45 kg packing, the price could have been higher for urea gold due to the saving of five kg per bag, said an official source. Moreover, since farmers are used to per bag application of fertiliser in their field, a saving of five kg may help cut overall urea sales, the source said.
The Cabinet Committee on Economic Affairs (CCEA) on June 28, 2023 approved the proposal for launching of the Sulphur Coated Urea to address sulphur deficiencies in the soil.
In a letter to the management of all fertilizer manufacturing companies, the fertiliser ministry on January 5 conveyed the government’s decision of the maximum retail price (MRP) fixed for Urea Gold. Approval has been given for introduction of Sulphur Coated Urea in 40 kg bag at the same MRP as that of 45 kg bag of Neem Coated Urea at ₹266.50 (inclusive of GST), said the letter. A formal notification will follow soon, the letter said.
“This communication will help manufacturers to print their bags with the MRP so that when production starts, the sulphur coated urea are packed in the bags. This will also help facilitate advance delivery of Urea Gold before the next kharif sowing starts around June,” the source said.
Overall consumption of urea (excluding nano-urea) during the April-November period in 2023 recorded a modest 3.3 per cent rise to 239.69 lakh tonnes (lt) from 232.03 lt a year ago. Whereas sales of all fertilisers put together jumped 6.6 per cent to 427.13 lt from 400.69 lt.
As farmers rushed to keep urea with them in the Rabi sowing season due to a shortage in 2022, sales of the nitrogen fertiliser in October 2023 increased 15 per cent from a year ago. But in November sales registered 19 per cent drop.
As there was no subsidy for nano-urea, it was speculated that Urea Gold might have been kept out of subsidy, too.
Imported sulphur cost (CFR) declined 39 per cent to $111/tonne during November 2023 from a year ago.