INDIAN FERTILIZER INDUSTRY AT A GLANCE IN 2017 - 2018 Performance for 2017-2018
The primary fertilizers sales witnessed a modest growth of around 2% in FY2018, on the back of low systemic inventory maintained by the fertilizer companies in view of pan-India implementation of Direct Benefit Transfer (DBT). As per ICRA’s report on the fertilizer industry, the overall urea sales recorded a growth of 2% in FY2018. Non-urea fertilizer sales volume also grew at a fair rate of 2% during FY2018 driven by healthy sales of DAP, MOP and complexes. The fertilizer sales growth is back on a positive trajectory post a 7% decline witnessed in FY2017.
The fertilizer industry’s financial performance continued to remain moderate in FY2018. Operating income witnessed 13% growth owing to the volume growth in fertilizer segment and growth in chemical segment realization.
Forecast
The demand for fertilizers in the next year is expected to remain stable given the outlook for normal monsoon during the kharif season and expected higher farm realization for crops supported by assurance by the Government of India for MSP at 150% of the cost incurred by farmers.
Government Initiatives
In the union budget of FY2018-19, the Government of India had increased the subsidy allocation for P&K fertilizers to Rs. 250 billion from Rs. 222 billion in FY2017-18; the increased allocation should enable the government to meet the increased subsidy outgo for the P&K fertilizers (estimated at Rs. 230 billion for FY2018-19).