India Raises Subsidies On Key Fertilizer Imports.

India has raised subsidies on key imported fertilizers to keep down the cost of farm production as global prices of the vital agriculture inputs have soared, a senior fertilizer ministry official said.

India, the world's largest buyer of fertilizers, imports around one-fifth of the urea is consumes annually. It meets also most of its DAP and MoP requirements through purchases from overseas. Fertilizers are key to improving crop yields in the country, where more than 60% of the population depends on farming for a livelihood.

The government fixes benchmark rates at which companies can import key fertilizers and reimburses the companies the difference between their sale price to farmers and the benchmark import price.

Indian companies have been finding it difficult to import fertilizers since the start of 2011, as global prices rose above the government-fixed benchmark rates due to a spike in the price of natural gas, a key feedstock to produce the farm nutrients.

The government has raised the benchmark import price of urea--the most widely-used fertilizer in the country--to $350 a ton from $310. The import price of di-ammonium phosphate, or DAP, crucial to plant growth and soil health, has been increased to $580 a ton from $450 and that of muriate of potash, or MoP, to $390 a ton from $350.

Source : indiainfoline.com