Even as the Centre is still dithering over raising the maximum retail price (MRP) of urea, fertiliser companies have resorted to massive rate hikes in all other nutrient products for the current kharif planting season.
The MRP of di-ammonium phosphate (DAP) — the country's most widely used fertiliser after urea — has gone up to Rs 24,000 a tonne from an average of Rs 18,200 during the last Rabi season.
Companies have, likewise, increased the farmgate prices (net of State taxes) of muriate of potash (MOP) and single super phosphate (SSP) from Rs 12,000 and Rs 4,800 to Rs 17,000 and Rs 7,800 a tonne, respectively.
The popular NPK complex fertiliser, 10:26:26, will cost Rs 22,000 a tonne against the existing Rs 16,000. Fertiliser companies have defended the latest MRP hikes in non-urea fertilisers, citing the rupee's depreciation and the Centre's decision to slash the subsidy on these nutrients.
The new prices are technically effective from June 1. However, the industry says that farmers would not have to pay these rates for stocks already dispatched to dealers.
The total quantity of this is estimated at about 5.5 million tonnes (mt), including 2.5 mt of DAP, one mt of MOP and 2 mt of SSP and various complexes. “We expect these stocks to last till end-July. But it is possible that dealers will sell even these at the new MRPs. We hope the State Governments take adequate steps under the Essential Control Order to prevent profiteering at the dealer's end,” an industry source pointed out.
Widen the differential
The latest price increases would only widen the differential between urea and other fertilisers, similar to that for diesel vis-à-vis petrol. Since April 2010 — when prices of all non-urea fertilisers were decontrolled — the MRPs of DAP and MOP have shot up from Rs 9,350 and Rs 4,455 a tonne to Rs 24,000 and Rs 17,000, respectively, now.
Against this, the MRP of urea, which is controlled by the Centre, has risen only marginally, from Rs 4,830 to Rs 5,365 a tonne.
The Department of Fertilisers had proposed a 10 per cent hike in the MRP of urea, which was taken up by the Cabinet Committee on Economic Affairs in its meeting on Thursday.
But with the upcoming Presidential polls making it politically difficult to accept the proposal, it was formally “referred back” to the Department for seeking “additional clarifications”.