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Budget 2012-13: Urea & Fertilisers Price To Go Up

The fertilizing companies are hoping to urea get costly in the financial budget. They also expect that, subsidy allocations for the fertilizers announced in the budget are good indicators of realizations and profitability of the farmers.

RCF Logo Rashtriya Chemical & Fertilisers

RCF - Rashtriya Chemical & Fertilisers

About 50% of the phosphate fertilizer producers and 55% for urea coming in through the government’s subsidy reimbursement, it is subsidies that decide the volumes, profits and even product mix for fertilizer makers. Now any signs government is now willing to push through direct cash transfers of subsidy to farmers.

The government is also taking initiative to correct the imbalance usage pattern, where most of the times farmers use too much urea and too little phosphate. Infact the storage provisions of the urea also added some more questions for price hike. Now the investors are eyeing on the firm commitments on gas allocations to urea and pass through mechanisms for feedstock costs.

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