June 27, 2012

India's 2016-17 urea demand, supply gap to grow to 11 million tonnes

The Fertiliser Association of India (FAI) said that by 2016-17 fiscal, the country's gap in the demand and supply of urea is anticipated to rise to 11 million tonnes.

The country produces around 22 million tonnes of the important nitrogenous fertiliser, while consumption is around 28 million tonnes. The shortfall of six million tonnes covered through imports.

"There is an urgent need for construction of new urea projects to fill the projected consumption and production gap of 11 million tonnes by the year 2016-17," FAI Director General Satish Chander told PTI.

India was self-sufficient in urea till 2001-02 but with rising consumption and lack of major investments, production could not catch up with the increasing demand, he added.

Emphasising upon the need for more investments in the urea sector, Chander said that in view of high capital costs, there has to be a favourable policy for investments in new projects.

"The government should come out with the new investment policy for urea. The industry is ready," he added.

According to a report of the Working Group set up by the Planning Commission for the 12th Five Year Plan (2012-17), India needs to invest INR40,000 crore (US$7 billion) in the fertiliser sector to increase the country's urea production capacity to 33.7 million tonnes by the end of the 12th Five Year Plan.