Right time to align DAP rates with mkt with minimal farmer impact: FAI chairman

The current financial year (FY26) has so far been good for the fertiliser sector, with strong monsoon and rise in crop acreages leading to robust demand.

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Fertiliser Association of India (FAI) Chairman, and Managing Director & Chief Executive Officer (MD&CEO) of Coromandel International, § Sankarasubramanian, in an interview with Sanjeeb Mukherjee, says India needs to move towards a more market-driven pricing formula, and that buying overseas fertiliser assets abroad will keep value capture outside India. Edited excerpts:

This year has been year of good sales for industry and imports. One reason was monsoon, another was good crop acreage. Is there a price factor playing into it, which is why farmers are easily going for DAP and urea?

In terms of volumes, consumption growth has been very moderate. In urea, it is just around 2 percent. So, it’s not that consumption has surged. Also, capacity creation cannot happen overnight. Our phosphatic plants are already operating at 100 percent, and for urea it is above 95 per cent. But there has been an additional demand push due to increased crop acreage, which lifted the volume. Additionally, inventory rebuilding played a major role. Part of the import volumes has gone into restoring stock levels. On the surface, it may appear that imports surged because production was down or consumption jumped, but consumption grew only marginally. This was primarily inventory buildup to meet rabi demand.

So, both urea and DAP have been under price caps, and the latter is now almost government-controlled?