Fertiliser output up as raw material prices fall

Prices of phosphate and phosphoric acid have fallen significantly leading to rise in production of widely used DAP fertiliser. Also, international prices of DAP fertiliser, which is the second widely-used fertiliser, have also fallen sharply over the last five years.
 
The fall in raw material prices have encouraged many domestic fertiliser producers to increase production and use the opportunity for capacity addition. Krishak Bharti, Deepak Fertilisers and the largest private sector producer Coromandel International have drawn capacity addition plans to cash in on the opportunity.
 
According to market reports, DAP production is expected to touch 4.2 million tonnes in FY17-18, strongly aided by rising demand for fertilisers from Indian farmers. DAP is the most widely used fertiliser after urea in India and accounts for 50 per cent share in total production.
 
Good monsoon, coupled with falling fertiliser prices, will result in incremental demand for fertilisers in India. Reduction in raw material prices will definitely lead to improved profitability of fertiliser companies.
 
Krishak Bharti Co-operative, the country’s second largest urea producer in JV with Morocco-based OCP. will produce DAP at Krishnapattanam in Andhra Pradesh. Deepak Fertilisers and Coromandel International have outlays of around Rs.800 crore and Rs.225 crore respectively for capacity additions