Govt To Consider Freeing DAP Prices Tomorrow.

The government may consider giving fertiliser firms freedom to fix maximum retail price (MRP) of di-ammonium phosphate (DAP) tomorrow. This move would help augment domestic supply of the key farm nutrient.

The proposal is listed on the agenda of cabinet that will meet at 4.30 PM tomorrow, a source privy to the development said. As of now, the cabinet has eight items for discussion.

Last week, the cabinet had deferred its decision on this issue in the absence of Fertiliser Minister MK Alagiri. ( THIS is what the fertilizer body had to say)

In April, the government had restricted companies from hiking the maximum retail price of DAP by more than Rs 600 a tonne from the then prevailing rate of Rs 10,750 a tonne.

However, the Fertiliser Ministry has moved a proposal to remove the restriction in view of soaring DAP prices globally and shortages at home.

The country is facing huge shortage of DAP as companies are not contracting DAP imports at high global prices, fearing losses because they are not allowed to raise the MRP beyond the cap fixed by the government.

As the sowing season has already begun from early this month, sufficient supply of DAP in the coming months will ensure good crop yields and production.

Fertiliser companies have so far entered into contracts for the import of 6 million tonne of DAP, of which only 1.5 million tonne has arrived, as against over 2 million tonne in the year-ago period, according to the official data.

The annual requirement of DAP in India is about 11-12 million tonne. Over 8 million tonne is met through imports from Morocco, Jordan, China and the US and the rest is produced indigenously.

DAP prices have gone up in global markets to over USD 600 per tonne from USD 460 level around seven to eight months ago.

Source : moneycontrol.com