Urea production to rise 7% to record 24 mn tn this year

Urea production is expected to rise by 7 percent to a record 24 million tonnes this fiscal and help reduce the country's import dependence, Fertiliser Minister Ananth Kumar said. Addressing the Fertiliser Association of India (FAI) annual conference, he said the Department of Fertilisers is working with the Finance Ministry to clear the Rs 40,000 crore subsidy arrears to the manufacturers. Kumar also highlighted that the fertiliser sector is growing at a very high rate of 18.6 percent.

"Urea production is to be higher this year at 240 lakh tonnes against 225 lakh tonnes last year," Kumar said. Urea is a controlled fertiliser and is sold at a fixed selling price of Rs 5,360 per tonne. The difference between cost of production and selling price is paid as subsidy to manufacturers.

Annual domestic demand of urea is estimated at 30 million tonnes, while the production is stagnant at about 22 million tonnes. The rest is met through imports. The government is reviving several closed urea plants to boost domestic production and cut imports.

Kumar had said yesterday that the country would soon become an urea surplus state from a deficit state and start exporting it. FAI expects that subsidy arrears could reach Rs 45,000 crore by end of this fiscal if no additional fund is being provided. About Rs 72,000 crore was allotted in the budget but the funds have almost exhausted.