Fertiliser firms look to import phosphoric acid at $1k per tonne

Phosphoric acid – An overview

• Phosphoric acid is a key raw material for the manufacturing of DAP and other NPK fertilizers

• The price of phosphoric acid was $1,715 per tonne for the last quarter ended 2022

• International prices of DAP fell sharply during last quarter and therefore the rates of phosphoric acid are also expected to fall

• The key international suppliers are OCP Morocco, JPMC Jordan, Senegal etc

New Delhi: Fertiliser companies are looking to import phosphoric acid at $1,000-1,050 per tonne, which is around 40 per cent cheaper than the price quoted by global suppliers in the September quarter, as international prices have declined.

Phosphoric acid is a key raw material for the manufacturing of DAP and other NPK fertilizers. According to sources, the price of phosphoric acid was $1,715 per tonne for the last quarter ended 2022. International prices of DAP (Di-ammonium phosphate) fell sharply during the last quarter and therefore the rates of phosphoric acid are also expected to fall, they added. The international prices of phosphoric acid are decided on quarterly basis.

The key international suppliers are OCP Morocco, JPMC Jordan, Senegal etc. Sources said a company has purchased a cargo of phosphoric acid from Senegal at price of $1,200 per tonne, but the rate is still higher. Leading Indian fertiliser companies are looking to buy phosphoric acid at $1000-1050 for the next quarter, sources said.

The Union Fertiliser ministry also feels that prices should be lower than $1,100 per tonne for the October quarter for phosphoric acid. Last week, Madras Fertilisers Ltd signed an MoU to import 30,000 tonnes of phosphoric acid solution annually from Dubai-based Agrifields to boost the availability of non-urea nutrients. About 1.67 lakh tonnes of NPKs will be produced by using this quantity of phosphoric acid. The MoU is for three years. This is a significant step toward improving the availability of DAP and NPK fertilisers for Indian farmers. The MoU was presented to Union Minister of Chemicals and Fertilisers Mansukh Mandaviyah on Friday.

"India's partnerships with global suppliers for ensuring a long-term supply of fertilisers to Indian farmers will also address international cartelisation," Mandaviya had said.

The minister had noted that the international market has seen a downward trend in phosphatic fertilisers and the same trend should get reflected in raw materials of fertilisers like Phosphoric Acid in the coming quarters. "Given India's high dependence on imports of raw material and fertiliser minerals, the government of India has been entering into such supply partnerships with global producers and suppliers for ensuring stable long-term availability of P&K fertilisers to Indian farmers," Mandaviya had said.

The government is making available fertilisers, namely urea and 25 grades of P&K fertilisers to farmers at subsidised prices through manufacturers/importers. In the case of urea, the Centre fixes the maximum retail prices and reimburses the difference between the maximum retail price and production cost in the form of a subsidy. Under the Nutrient Based Subsidy (NBS) scheme, which is being implemented since April 2010, a fixed rate of subsidy (in Rs per kg basis) is announced for nutrients namely Nitrogen (N), Phosphate (P), Potash (K) and Sulphur (S) by the government on an annual basis. The subsidy rates per kg for the nutrients N, P, K, and S are converted into per tonne subsidies on the various P&K fertilisers covered under the NBS.