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BY-
GROUP-1
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India is the third largest producer and 2nd largestconsumer of fertilizer in the world.
The private sector produced 44.73 % ofnitrogenous fertilizers and 62.08 % of phosphatic
fertilizers in 2006-07.
Total production of fertilizers in india-206.5mt .
The production of urea in India has reached nearself-sufficiency.
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The requirement of the nitrogenous fertilizers ismet through the indigenous industry
In the case of phosphatic fertilizers, the rawmaterials and intermediates are imported in largescale.
The requirement of potash (K) is met entirelythrough imports.
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No fertilizer unit of India has any reserve of
potash. 65 large-sized fertilizer plants in India .
32 units-urea
20 units-DAP & complex fertilizers 13 units-ammonium phosphate & CAN
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Started in 1906 with SSP productionfacility at Ranipet near Chennai.
Started operating in a big scale since1940s, when the Fertilizer & ChemicalsTravancore of India Ltd. and the
Fertilizers Corporation of India were setup in Kerala and Bihar
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Pre Liberalization
Post Liberalization
-Phase 1: 2000-01 and 2001-02
-Phase II (2002-03-2003-04)
-Phase III (2004-05-2006-07)
W T O Implications
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Most companies are expecting approval fortheir huge capital expenditure plans fromdepartment of fertilizer and industry
Indian fertilizer companies joined hands with
Jordan, Senegal, Oman, Morocco, Egypt etc The demand for fertilizer has increased by
5% (21 June 2010, Rashtriya Chemicals and
fertilizer) 10% increase in Urea price in April 2010
Fertilizer subsidy has taken largest share for58.7% of total subsidies in 2008-09
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The Fertilizer Industry in India started its firstmanufacturing unit of Single Super Phosphate(SSP) in Ranipet near Chennai with a capacity
of 6000 MT a year. Total capacity of the industry has reached a
level of 121.10 lakh MT of nitrogen (inclusive ofan installed capacity of 208.42 lakh MT of urea
after reassessment of capacity) and 53.60 lakhMT of phosphatic nutrient.
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The Indian fertilizer industry has a capacity of56 lakh MT of phosphatic nutrient and 121 lakh
MT of nitrogen. While the private sector has a huge installed
capacity for phosphatic fertilizers, capacityutilization of nitrogenous fertilizers is higher in
the public sector.
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Sector-wise, Nutrient-wise Installed FertilizerManufacturing Capacity as on 31.01.2007-
63 large units dedicated to the production offertilizers.
9 units produce ammonium sulphate while 38units produce urea.
79 small and medium scale units producingsingle superphosphate.
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Import of urea, DAP & MOP 6.61, 7.41, 6.36
Mte Retail prices of urea increased from Rs.4830/-
per tonne during 2009-10 to Rs.5310/- per
tonne during 2010-11 P & K as per NBS Policy, retail prices were
opened & market driven
NPK use ratio changed from 4.3:2:1 (2009-10) to
5:2.4:1(2010-11)
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P
RODUCTION
(Mte)
MODEST INCREASE IN DOMESTICPRODUCTION
HIGH IMPORTS
IMP
ORTS
(Mte)
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HIGH GROWTH IN CONSUMPTION
CONS
UMPTION
(MTe)
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Determinants of fertilizer demand are:-
Rainfall and irrigation facilities Relative prices of fertilizers
Cropping pattern
Government policy National Income & Growth
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India's demand for fertilizers in 2007-08 was 26MM tons, which went up to 29 MM tons in 2008-09
against a supply of 20 MM tons in 2008-2009. The demand for fertilizers in 2011-12 is forecasted
to be around 35.5 MM tons.
More fertilizer projects are in the pipeline.
Gujarat is expected to play a leading role infertilizer production.
Indian companies have penetrated the overseasmarket, signaling a new phase for the industry.
The per hectare consumption of fertilizers innutrients terms increased from 105.5 kg in 2005-06to 128.6 kg in 2008-09.
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Undertaking inspection and analysis ofimported and indigenous fertilizers
Standardization and development of method
of analysis Training of fertilizer enforcement officers and
analysts.
Acting as a referee laboratory
Providing technical guidance to the Centraland State governments on Fertilizer QualityControl Laboratories.
Fertilizer movement control order(1973)
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FERTILISER CONTROL ORDER 1957
FERTILISER MOVEMENT CONTROL ORDER 1973
RETENTION PRICE SCHEME 1977
BLOCK DELIVERY SCHEME 1980-81
JOINT PARLIAMENT COMMITTEE ONFERTILISER PRICING 1991
FERTILISER PRICING POLICY 1997 NORMATIVE REFFERAL PRICE (BASED ON
LONG RUN MARGINAL COST) 1997-98
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BUREAU OF INDUSTRIAL COSTS & PRICES1998-99
NEW PRICING SCHEME 2002 FERTILISER MONITORING SYSTEM 2007
USE OF CUSTOMISED FERTILISER (ADDTLCLAUSE IN FCO,1985) 2008
FREIGHT SUBSIDY 2008
NBS 2010
SECONDARY & MICRONUTRIENT (B,ZN)
2010 FEEDBACK STOCK POLICY 2011
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Farm gate price of urea is amongst the lowestin the region and is heavily subsidised.
Retention price of controlled fertilizers isfixed in every 3 years.
1992-govt. decontrolled import of complexfertilizers (DAP & MOP).
For each decontrolled fertilizer, the
Maximum Retail Price (MRP) is indicated byCentral Government except for Single SuperPhosphate, the MRP of which is indicated byeach State/UT Government.
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NBS policy on decontrolled Phosphoric and
Potassic fertilizer w.e.f 1 st April ,2010.
Fix subsidy on N,P,K,S for 2010-11
Additional per ton subsidy for subsidized
fertilizer carrying other secondary nutrientsand micronutrients.eg in Zn,Boron.
Retail prices fixed by companies at farm gatelevel
10% increase in price of urea (Rs 4830 to Rs5310)
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Started from 1 April 2003
Objective- encouraging efficiency basedfertilizer pricing
High Powered Fertilizer Pricing Policy ReviewCommittee (HPC)
At present, the maximum retail price (MRP) ofurea is Rs. 483 a quintal, while DAP costs Rs.935 a quintal and MOP Rs. 445.50 a quintal.
First 2 stages-prices was decided on the basisof energy consumption
Third stage(2006-10)-conversion of all farmsinto natural feed stock.
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On 31stMarch11, Govt announced buy-bachkscheme of fertliser bonds through RBI in2 tranches of 50% each
Govt decided to compensate at least 50% of theloss on sale of bonds to RBI
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INDIAN AGRICULTURE
FOOD GRAIN PRODUCTION
SOIL FERTILITY IN INDIA
EMPHASIS ON IMPORT
IMPROVEMENT OVER CURRENTSCENARIO
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LONGTERM SUSTAINABILITY- NATURAL RESOURCES,
PRICE- ENERGY,SUBSIDISED PRICE
POLICY
GREEN REVOLUTION- GROWTH
SUSTAINABLE AGRICULTURE
R&D
CAPACITY
IMPORT
SOIL HEALTH
FERTILISER MARKETING
TECHNOLOGY
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Per capita fertliserconsumption is low
New joint ventures
Deregularisation Fast growing
population 2/3 population still
depends on farming as
a source of livelyhood
Uncertainty prevailingover policy
Late payment ofcommision
Shortage of feedstock Biofertilisers lack of monitoring lead
to anti competitive at the
level of distribution offertilizers to endconsumers.
THREATSOPPORTUNITY
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WEAKNESS STRENGTHS
High inventory carrying cost
Liquidity crunch Deterioration of quality due to
prolonged storage
Scarcity Lower import leading to
High International price
Additional burden on exchequer
Non-availability of fertilizer intime leads to lesser yield from farm
Market scarcity
Labour shortage
Stringent Govt. Policy
Supply Constraints
Production- Technical/Equipmentproblem
Feedstock/raw material shortage
Power shortage
High International Price
Low Exportable surplus
HYV Seeds
Availability
Credit availability Promotion & awareness
Demand factor
foreign investments in
India
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Political FactorsGovernment Support to Urea Manufacturing
Ineffective Implementation of GovernmentRegulationsGovernment Support for R&D in ChemicalIndustry
NBS Policy
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Economic FactorsHigh Taxes & Cost of Finance Eat into MarginsOngoing Reforms to Ensure a Favorable FDIPolicyNew investment Policy
Technological Factors:
Role of ICT Social Factors
Low-Cost Human Capital and TechnologicalExpertiseSurge Expected in Per Capita ChemicalsConsumption
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Fertilizer Corporation of India Limited (FCIL)
Hindustan Fertilizer Corporation Limited (HFC)
Pyrites, Phosphates & Chemicals Limited
Rashtriya Chemicals and Fertilizers Limited (RCF) National Fertilizers Limited (NFL)
Projects &Development India Limited (PDIL)
The Fertilizers and Chemicals Travancore Limited
(FACT) Madras Fertilizers Limited (MFL)
FCI Aravali Gypsum & Minerals India Limited,Jodhpur
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The Scientific Fertilizer Co Pvt Ltd
Coromandel Fertilizers Deepak Fertilizers and Petrochemicals Corporation
Limited Gujarat State Fertilizers &Chemicals Limited Tata Chemicals Limited
Chambal Fertilizers Nagarjuna Fertilizers and chemicals limited Godavari Fertilizers and Chemicals limited Zuari Industries limited Apratim International
Devidayal Agro Chemicals Aries AgroVet DSCL
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Consumer
base-high
Industry
Competitors
Rivalry among
existing firms-
low
Bargaining
power of
suppliers-low
Barriers to entry-high
Bargaining power
of buyers-low
FertilizerProducers
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Here, Suppliers are Raw materials Suppliers;Buyers are Distributors.
Bargaining power of suppliers-LOW Bargaining power of buyers-LOW
Barriers to entry HIGH
Consumer Base-HIGH
Rivalry among players LOW
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FertilizerDistributors Threat of
substitutes-
low
Industry
Competitors
Rivalry
among
existing
firms-low
Bargaining
power of
suppliers-high
Barriers to
Barriers to
entry-high
Bargaining power of
buyers-low
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Here Suppliers are the producer; Buyers are thefarmers.
Threats of substitutes
LOW Bargaining Power of Suppliers- HIGH
Rivalry among existing players- LOW
Bargaining power of the buyer(farmer) LOW
Barriers to entry- HIGH
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Fertiliser Industry & foodprocessing
Fertiliser industry & rural market
Fertiliser industry & seeds
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Greater dependency of country onimports( also feedstock)
Unable reduce burden of
government in subsidiary rates Infrastructural bottlenecks
Uncertainties in government policies
Small size of older plants
Low cost of production
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EXTENSION OF FERTLISER UNDER NBS DECANALISATION OF UREA
FERTILISER INDUSTRY SHOULD BE ANINDUSTRY OF NATIONAL IMPORTANCE
INVESTOR POLICY FOR LONG TERMINVESTMENT IN UREA
VAT HOLIDAY & SUBSIDISED ELECRICITY
SUPPLY TAX & DUTIES
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INDIAN JOURNAL OF FERTILISER, SEP11
ECONOMIC PLANNING
FAI ANNUAL SEMINAR 2010
ROLE OF ICT IN FERTILIZER & AGRICULTURE
SECTOR AND FUTURE PROSPECTS (S. C.MITTAL, IFFCO)
COMPETITION ASSESSMENT OF FERTILIZERSECTOR: INDIA 2011
DEMAND ANALYSIS & FORECASTING THEFERTILIZER INDUSTRY IN INDIA 2010-12
RURAL MARKETING
THE HINDU, 28THFEB11
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THANK YOU