RECORD UREA PRODUCTION DURING FIRST SIX MONTHS
There is a record
production of 11.3 million tonnes of urea during the first six
months of the current financial year. The actual production has
been 11.3 million tones. The widespread favourable monsoon contributed
to spurt in demand and growth of 4 per cent in sales during kharif.
The urea consumption was 9.32 million tonnes against the last
year’s kahrif of 8.94 million tonnes.
The New Pricing
Scheme has contributed significantly to greater efficiency both
in terms of overall production as well as economy of feedstock
consumption. The marketing of urea has also been gradually deregulated
and fifty per cent of the production during rabi is being sold
in the market by the urea units as per their corporate marketing
strategy. There is a qualitative shift and the units have undertaken
exports to Nepal and are also exploring opportunities in the African
market. Urea units have also sold urea to complex fertilizers
manufacturers, thus replacing the need for imports.
By producing
urea beyond 100 per cent of capacity and thus meeting the indigenous
demand, supplies to complex manufacturing units and exports to
neighbouring countries, the country has saved approximately US
$ 87 million foreign exchange.
The imported
urea today cost around Rs.9500 per tonne while gas based urea
plants in India manufacture urea at an approximate cost of Rs.6000
per tonne. Naphtha based urea units have a higher manufacturing
cost around Rs.12000 per tonne. The weighted average cost of production
of all plants inclusive of gas, naphtha and fuel oil is Rs.8300
per tonne which is lower than the imported urea price. Thus, there
is a significant saving in the subsidy as a result of higher indigenous
production. The Department of Fertilizers has already proposed
new pricing regime as an incentive for conversion of naphtha based
units to gas based units. This would be implemented as soon as
gas supplies as feedstock is assured for the units.
