Fertilizers production has increased by 4.1% during 7MFY21 after registering a growth of 2.6% during 7M-FY20, CARE Ratings has stated in its latest report.
"On a monthly basis, production increased by 6.3% during October '20. The country witnessed an on-time arrival of Southwest monsoon, followed by a quick spread across the region which has resulted in higher sowing thus augmenting the sales of fertilizers which has led to an increase in production.
Increase in production can also be ascribed to restocking activities undertaken by the manufacturers in order to keep up with the sharp increase fertilizer sales witnessed during the year. Imports have increased sharply by 18.2% due to by the sharp increase in urea imports," CARE Ratings has said.
The rating agency has noted that import dependence (imports as a proportion of production plus imports) has fallen from being 36% to 39% during 7M-FY21.
"Production of urea increased by 5% during 7M-FY21 due to favourable weather and market conditions. Imports have risen sharply by 36.4% to supplement the increase in demand. Import dependence of urea (imports as a proportion of production plus imports) has increased to 31% during 7M-FY21 compared with being 25% during 7M-FY20," CARE Ratings has observed in its report.
According to the rating agency, DAP production fell by 10.1% during 7M-FY21.
"Decline in production can be attributed to the shortage in raw material availability and labour constraints. Imports on the other hand have risen by 13.9% in the same period," it noted.