India Ratings and Research (Ind-Ra) indicated that the demand for conventional granular urea bags, suitable for both basal and foliar applications, is expected to remain aligned with the country’s total production capacity, estimated at around 31 million tons annually.
Despite government initiatives like the PM-PRANAM scheme aimed at promoting nano-urea and reducing overall chemical fertilizer consumption, conventional granular urea will continue to see significant demand.
Bhanu Patni, Associate Director (Corporate Ratings) at Ind-Ra, emphasized that fertilizer consumption is growing at a rate of 6-7% per year, while adoption of nano-urea will be gradual. He stated that there is currently no immediate risk of sales for conventional urea bags dropping below the production capacities of domestic plants.
Official figures highlight a 7% decrease in India’s urea imports to 7.04 million tons in FY24 from 7.58 million tons in FY23. Urea production saw a notable increase of 20.9% in the last fiscal year, rising to 31.41 million tons from 25.98 million tons, with sales nearly matching production at 35.78 million tons compared to 35.68 million tons.
The agency informed that over the past 2-3 years, there have been supplementary budgetary allocations to maintain raw material availability and economic viability amidst price fluctuations in key inputs. The support is anticipated to continue into FY25, alongside stable natural gas prices and declining prices of crucial raw materials such as phosphoric acid, rock phosphate, and sulphur.
Ind-Ra analysts projected a comfortable credit profile for fertilizer companies in FY25, underpinned by the government’s sustained policy support through a substantial subsidy budget amounting to ₹1.64 lakh crore.
As reported by businessline, the agency highlighted a decline in average prices for input raw materials for nutrient-based fertilizers: phosphoric acid dropped to $968 per ton from $974 (FY24 average), rock phosphate decreased to $203 per ton from $213, and sulphur reduced to $150 per ton from $335.
