India's fertiliser demand to rise by 5% in FY11: IFFCO.

MUMBAI: India's fertiliser demand is likely to rise by about five percent to 56 million tonnes in FY11, a senior industry official said on Monday. "Last year consumption was 53 million tonnes.

This year we are expecting a rise, by about 5 percent to 56 million tonnes," US Awasthi, managing director, Indian Farmers Fertiliser Co-operative Ltd (IFFCO), told Reuters on the sidelines of a conference. He said domestic fertilizer prices have risen 5-10 percent, but farmers were not resisting the rise due to a hike in support price of food grains.

"We are talking with a Russian company for a joint venture for fertilizer production there ... right now I can't disclose the name of the company," he said, adding IFFCO had been looking for opportunities in Canada, which did not materialise.

In February, IFFCO acquired a 10 percent stake in Calgary, Alberta-based Americas Petrogas, and a 20 percent stake in its unit GrowMax Agri Corp, which owns a potash brine project currently being developed in Peru. "Fertilizer imports would be steady to slightly higher this year. We have already contracted required quantity," he said. India imports nearly one-third of its total fertilizer requirement, with potash and phosphate constituting bulk of it.

He said potash, diammonium phosphate (DAP) and nitrogen prices were steady in international market and unlikely to see a sharp movement in short-term. "After correcting from highs, potash prices are steady. I think potash will rule between $350 to $370 per tonne in the short-term," he said.

Farmers were using more fertilizers to raise productivity, but excessive use of nitrogenous fertilizer urea is deteriorating soil fertility, he said, stressing the need for micronutrients. "We are planning to fortify fertilizers produced from our plants with micro nutrients like sulphur, zinc and boron.

Everything is ready. We can start production from tomorrow. We are waiting for the government notification," he said. IFFCO has installed production capacity of 8.5 million tonnes and produced 8.2 million tonnes of fertilizers in 2009/10. Awasthi said the company is set to raise capacity by 1.5 million tonnes this year, but is awaiting gas allocation from the government.

IFFCO is also in the final stages of setting up a 1,320 megawatt coal-based power plant in the central state of Chhattisgarh with an investment of 73 billion rupees. "We are at the final stages of clearance ... the power plant work may start soon," he said. The company is in talks with dairy companies in New Zealand and the US to start a 10-billion-rupee integrated dairy project in Nellore, Andhra Pradesh. "The deal may come through by December end," he said.

Source : economictimes.indiatimes.com