Soaring Fertilizer Demand Shoot Up the Price of Potassium Chloride in India
- 10-Dec-2021 2:00 PM
- Journalist: S. Jayavikraman
Fertilizer demand in India has been soaring since prolong time, supporting the steep hike in imports as well in price trend for several fertilizers including Potassium Chloride/Muriate of Potash (MOP). As per ChemAnalyst data, Potassium Chloride/Muriate of Potash (MOP) prices has been rising since the month of September in the domestic market due to crippling availability amid high demand fundamentals from the downstream agriculture sector. Potassium Chloride (92% purity) in India was assessed at around INR 43580/MT during November, more than 40% higher than past few months.
The Indian government has been trying to enhance imports of all the major fertilizers to protect farmers profitability and control food inflation in the country. Therefore, several protective measures have been taken, like improving imports and injecting more subsidies to the agriculture sector. However, production cuts in China and anticipated high demand for Rabi crops eventually depleted the inventories of domestic manufacturers and traders. Furthermore, it was observed that not only spot prices, but contract purchase has also turned expensive, where manufacturers quoted higher prices for scheduled purchases too. Meanwhile, consumers are also battling with black marketing and stocks hoardings, which are creating unnecessary havoc of shortage and compelling them to procure cargoes at a premium cost.
Potassium Chloride is widely used fertilizer in the global market; however, it is also highly utilised by Dyes manufacturers. As per the ChemAnalyst analysis, fertilizer cost including Potassium Chloride (MOP) is unlikely to show ease anytime soon in the country, as several major factors are backing the current price trend of fertilizer in the global market. Meanwhile, Russia has imposed an exports quota for Nitrogen fertilizers which will also negatively impact the inventories of Indian traders. Furthermore, China has also imposed a ban on Phosphate fertilisers due to domestic scarcity, which resulted in a further elevation of Phosphate fertilizers prices like Diammonium Phosphate (DAP). Conclusively, Potassium Chloride/Muriate of Potash prices are anticipated to remain buoyant for a further period, on the back of domestic scarcity amidst stable to firm demand fundamentals.