The Indian government is considering raising the nutrient-based subsidy (NBS) for DAP by around 6,000 rupees/t to around Rs27,911/t for the March-September kharif season.
The special additional subsidy of Rs3,500/t for DAP, bringing the current subsidy to Rs25,411/t, is likely to be extended into the kharif season. The special subsidy was initially due to end by 1 April.
This would bring the total subsidy for DAP to around Rs31,411/t from Rs25,411/t in the October 2024-March 2025 rabi season.
The Inter-Ministerial Committee had proposed raising the NBS for DAP by Rs5,980.60/t last month.
The government will still cover losses to importers, but there is no indication that losses will be made up for producers.
The maximum retail price (MRP) for DAP is likely to remain at Rs27,000/t.
The disparity between the NBS and MRP in India, and a bullish global market, have made DAP receipts unaffordable for Indian importers. Argus' latest daily DAP assessment stands at $648-650/t cfr India, or $80/t higher than the midpoint of the 28 March 2024 assessment.
Firm phosphoric acid and sulphur prices are lifting costs for domestic producers. Jordanian producer JPMC and Indian importer CIL have agreed a second-quarter phosphoric acid price of $1,153/t P2O5 cfr India, up by $98/t P2O5 from the first quarter. And Indian sulphur import prices are up by $91/t at the midpoint from the start of this year. But a drop of $102.50/t at the midpoint in ammonia cfr prices gives Indian producers some relief.
