As the Indian government is all set to present the Union Budget on 1 February, the agriculture and fertiliser sectors will be closely watched for any changes in terms of allocation and subsidies.
Fiscal 2023 began with unprecedented climate change challenges and geopolitical risks. This was followed by deficient monsoon in the eastern parts of India, a heat wave in April-May 2022 that led to decline in wheat production, and finally a cold wave. All of these have impacted the overall crop production.
On the fertilisers front, international fertiliser prices saw significant increases, along with prices of key raw materials. Strong demand, and the ongoing geopolitical issues curtailed the supplies of certain fertilisers. However, prices have now begun to decrease as international demand is weakening at these high levels. As a result, allocation to fertiliser subsidy increased to a record high of Rs 2.15 lakh crore in FY23.
Performance of stocks in FY23 so far