Russian companies have stopped offering fertilizers such as di-ammonium phosphate (DAP) to India at discounted prices due to tightening global supplies after becoming the country’s biggest supplier last year, three industry sources told Reuters .
Moves by Russian companies in August to offer fertilizer at market prices could increase India’s import costs and subsidy burden amid rising global prices, as top exporter China tries to limit sales abroad.
“There are no discounts,” said a senior New Delhi-based industry official involved in negotiations with overseas suppliers.
“Russian companies are offering fertilizer at market prices,” said the official, who declined to be named because of the sensitivity of the issue.
India’s fertilizer imports from Russia surged 246% to a record 4.35 million metric tonnes in the 2022/23 financial year ending March 31 as suppliers discounted global market prices for DAP, urea and NPK fertilizers.
Russia’s aggressive sales last year eroded India’s market share against other fertilizer exporters including China, Egypt, Jordan and the United Arab Emirates.
“Russian companies are offering DAP at a discount of US$80 (per ton). However, now they are not offering a discount of even US$5,” said another Indian company official.
The current price of Russian DAP is about US$570 per tonne on a cost and freight (CFR) basis for Indian buyers, which is the same price offered to other Asian buyers, a Russian industry official said.
Global fertilizer prices have soared over the past two months, making it difficult for Indian companies to build up stocks for the coming winter season as demand for DAP for the wheat crop increases, said an official from a Mumbai-based fertilizer company.
In July, global suppliers were offering urea at around $300 per tonne on a CFR basis, but are now offering prices of $400 per tonne, he said. DAP prices were around $440 per tonne in July, he added.
“Global fertilizer prices are rising just before India’s crucial state elections. The government has no choice but to increase subsidies to protect farmers,” added an official from a Mumbai-based company.
Source : Tempo.co