INDIA FERTILIZER MARKET
- India and China account for 40% of the global consumption of fertilizers.
- Indian fertilizer production at 18.512 million MT (Nitrogen + Phosphate) witnessed a modest growth of 3.3% during 2019-20.
- Production of nitrogen (N) increased by 2.9% to 13.722 million MT and that of phosphate increased by 4.4% to 4.790 million MT in 2019-20.
- Production of urea at 24.455 million MT, DAP at 4.550 million MT and SSP at 4.244 million MT during 2019-20 marked increase of 2.3%, 16.7% and 4.1%, respectively, over 2018-19.
- India’s dependency on import at present is to the extent of 25% of requirement of Urea, 90% in case of Phosphates, either as raw material or finished fertilizers (DAP/MAP/TSP) and 100% in case of Potash.
- External factors such as weather and monsoon conditions as well as policy changes regarding fertilizer production, use and agricultural output enhancement exert significant influence on capacity utilization in the industry.
- In India, there are mainly two modes of transportation for fertilizers from plants/ports, i.e. rail and road. More than 80% of fertilizers are moved by railway network and the remaining by road.
- Indian fertilizer sector registered positive growth of 3.7% during April-December, 2020. The fertilizer sector is one of the industries that has been registering positive growth during the COVID crisis.
- Fertilizer production is one of the most energy-intensive processes in the Indian industry. Energy is consumed in the form of natural gas, associated gas, naphtha~ fuel oil, low Sulphur heavy stock and coal.
The fertilizer industry presents itself as one of the most energy-intensive sectors within the Indian economy and is therefore of particular interest in the context of both local and global environmental discussions.
Agricultural growth is mainly dependent on advances in farming technologies and increased use of chemical fertilizers. The effectiveness of fertilizers can only be assured if applied in optimal combination specific to the local soil and climatic conditions.
INDIA FERTILIZER MARKET DYNAMICS
The Government has been encouraging Indian Companies to establish Joint Ventures abroad in Countries which are rich in fertilizer resources for production facilities with buy-back arrangements and to enter into long term agreement for the supply of fertilizers and fertilizer inputs to India. Further, the Department is also working to have access to the acquisition of the fertilizer raw materials abroad.
The government ensured that production, movement and sale of fertilizers remained uninterrupted during the lockdown and thereafter. Fertilizer and allied activities were exempted from lockdown restrictions. Railways waived penalties of demurrage and wharfage and priority was given for berthing of ships, discharge and movement of fertilizers from ports.
Companies producing phosphatic & potassic (P&K) fertilizers are operated under a partially decontrolled environment. But the sector suffers from unfair competition from imports. Taxation regimes including customs duty and GST are harming the viability of domestic production. It is reflected in the low capacity utilization of plants manufacturing complex fertilizers.
A large number of restrictions in the marketing of fertilizers inhibit innovation in the transportation, storage and sale of fertilizers. This does not permit cost optimization. But more importantly, many times these restrictions affect the timely supply of fertilizers in certain parts of the country.
INDIA FERTILIZER MARKET SEGMENTATION
By Product Type
- Chemical Fertilizers
- Di-Ammonium Phosphate (DAP)
- Muriate of Potash (MOP)
- Complex Fertilizers.
- Grains & Cereals
- Oil Seeds
- Fruits & Vegetables
INDIA FERTILIZER MARKET SIZE AND FORECAST
The Indian Fertilizer market is estimated at $XX Billion in 2020, growing at XX% CAGR till 2026.
In 2020, Coromandel introduced four new technologically superior products in the Nutrient business. Crop Protection portfolio was strengthened by introducing six new chemistry products and leveraging technology to improve the solutions in the areas of soil health, crop diagnostics, nutrient and agrochemical recommendations. The COVID-19 pandemic has accelerated digital adoption in the areas of digital marketing, farmer and dealer engagement and supply chains. FY 20-21 likely to be a defining year for ag-tech adoption by the farmers.
Indian agriculture has been constrained by the structural limitations and resource constraints – small landholdings, monsoon dependency and lack of output marketing infrastructure, which has severely impacted its productivity. With further resource shrinkage and the need to feed an ever-increasing population, agriculture needs to reinvent itself, adopt smart technologies and sustainable agriculture practices.
Tata Chemicals has been working for climate change mitigation by reducing carbon footprint. Their emissions reduction targets for operations in India, North America, Europe and Kenya have been approved by the Science Based Targets initiative, being consistent with levels required to keep global warming to a well below 2°C.
The Indian Fertilizer industry is predominantly dependent on imports either for the raw material & intermediaries or for finished products. Further for manufacturing technology also, the country is completely dependent on big foreign players for the technology license for setting up of new plants as well as for technological up-gradation of existing plants.
The country has several institutions conducting extensive research on the subjects focused primarily on agriculture, however, there is no dedicated research institution in the country which is exclusively devoted to research in the fertilizer sector. There is a growing need for setting up a National Level Research & Development Centre, exclusively devoted to the promotion of research in the fertilizer sector.
The chemical fertilizer industry is operated in a hazardous environment and faces many risks including those related to health, safety and the environment in addition to general business & financial risks. To mitigate them, the Companies have a comprehensive Risk Management Policy that is regularly reviewed and a periodical review of the risks, procedures and strategies is undertaken.
Currently, there are many challenges being faced by the Fertilizer Industry which needs to be addressed including delay in payment of subsidy due to inadequate subsidy budget for fertilizers set by the Government of India, over regulations and procedural delays, unviable investment by Industry on energy saving schemes to meet the stiff energy norms fixed under New Urea Policy (NUP-2015).
- Coromandel International Limited
- Chambal Fertilisers and Chemicals Ltd
- Gujarat Narmada Valley Fertilizers & Chemicals Ltd.
- Rashtriya Chemicals and Fertilisers Ltd
- Fertilisers and Chemicals Travancore Ltd.
- National Fertilizers Ltd.
- Tata Chemicals Ltd.
- Mangalore Chemicals and Fertilisers Ltd.
- Southern Petrochemical Industries Corporation Ltd.
- Zuari Agro Chemicals Ltd.
- Deepak Fertilizers and Petrochemicals Corporation Ltd.