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DOF rules out NBS modification while admitting its urea-related adverse impact

Nov 25: The Department of Fertilizers (DOF) has no plans to amend nutrient-based subsidy (NBS) scheme even though its implementation has contributed to imbalanced use of urea.
8Answering a question on study on use of Fertilizers in Lok Sabha, the Minister of State for Chemicals and Fertilisers Ananth Kumar said: “A study on the impact of NBS policy had been conducted inter-alia covering fertilizer usage trends in the country. The draft report of the study indicates that in the post–NBS period imbalance in the application of P&K fertilizers relation to the use of urea has been observed in some regions of the country.”
8He added: “At present, there is no proposal to modify the present Nutrient Based Subsidy Scheme for Phosphatic and Potassic Fertilizers. However, the Government is already encouraging use of bio-fertilizers alongwith chemical fertilizers for increased productivity and balanced fertilization of soil.”
8According to the Reply, Indian Council of Agricultural Research has also assessed the soil health and crop productivity in different soil types (fixed locations) under dominant cropping systems. The investigation over the last few decades indicated that continuous use of nitrogenous fertilizer alone produced the highest decline in crop yields at almost all the locations showing deficiencies of other nutrients. Even in NPK fertilized system, the deficiency of micro and secondary nutrients surfaced after few years affecting crop productivity. Only integrated use of optimal dose of NPK and organic manure maintained soil health/quality with higher crop productivity.
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MOEF panel caps ammonia storage for FACT?s complex fert expansion

Nov 25: The Ministry of Environment & Forests (MOEF)-constituted experts’ committee for assessment of chemical process-based industrial projects (Industry-2) has stipulated that Fertilisers and Chemicals Travancore Limited (FACT) should not store more than 5000 tonnes of ammonia at any given time at its expanded complex fertilizer plant at Kochi.
8At its last meeting held during 29-30th October 2014, the Committee re-considered its recommendation to grant of environmental approval for expansion of plant’s nitro phosphate fertilizer (NP 20:20 grade) capacity to 3000 tonnes per day (tpd) from 2000 tpd.
8The Committee has stipulated that “ammonia bearing fumes from the reactor and granulator of the Complex Fertilizer shall be scrubbed. Scrubbing shall have interlocking system with main plant.”
8The Committee had earlier considered the project for environmental clearance at its meeting held during 28-29th April 2014. In that meeting, “the Committee noted that there was an error in the ambient air quality monitoring data as tabulated in EIA report. Minimum value has been reported as maximum and vice versa. The Committee requested that the table may be rechecked and submitted as part of the EIA – Report. PP vide letter dated 10th July, 2014 (received in the Ministry on 19th September, 2014) has submitted the corrected EIA-EMP report.”
8According to the minutes of latest meeting, after detailed deliberations, the Committee, on the basis of the documents furnished and presentation made, the recommended the project for environmental clearance.
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RCF seeks tenders for supply of rock phosphate of Jordan origin

Nov 24: Rashtriya Chemicals and Fertilisers Limited (RCF) has invited offers for supply of 90,000 tonnes of rock phosphate of “Jordan origin” at Mumbai port.
Of the total quantity, 60,000 tonnes is required in two equal parcels on firm basis and the balance 30,000 tonnes is to be purchased at RCF’s option.
8The selected bidder would have to deliver the first parcel of 30,000 tonnes by the 1st half of January 2015 and 2nd one of the same quantity by March 2015. The optional parcel, if decided, would have to be shipped by April 2015.
8RCF says: “The price quoted shall be based on minimum P2O5 content offered on dry basis. In case the P2O5 content is found to be less than the offered minimum P2O5 and is not below 33.40% based on analysis reports submitted by separate independent inspection agencies, appointed by RCF and supplier at load port, pro-rata rebate in the invoice shall be given at the applicable CFR price.”
8It adds: “In case P2O5 content is found to be below 33.40%, RCF shall have right to reject the consignment or accept at its sole discretion. However, in case RCF accepts the consignment at its sole discretion, in such case the mutually agreed damage on account of lesser P2O5 shall be equivalent to five times prorata rebate for P2O5 content lower than guaranteed minimum P2O5 percentage upto actual analyzed P2O5 percentage. The rebate shall be applicable on CFR price.”
8The last date for submission of bids is 3rd December 2014.
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MFL solicits offers for supply of phosphoric acid

Nov 24: Madras Fertilizers Limited (MFL) has invited global bids for supply of 10,000 tonnes of phosphoric acid at Chennai port.
8MFL says: “Bidders shall offer their best price for 30 days free credit also, if additional 30 days Buyers credit is not acceptable and those who are offering maximum credit period with lowest rate shall be taken in to consideration for evaluating L1 vendor.”
8It adds: “It is expressly agreed by Seller that ,if the price of the Phosphoric Acid (100% P205), contracted by any of the supplier to Indian Market, becomes lower than the price agreed upon in the final LOI /Contract against this tender, the same price shall be applicable for this shipment.”
8The last date for submission of offers is 5th December 2014.
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Uralkali believes Indian potash market has endured the rain deficit

Nov 21: Russia’s Uralkali believes that Indian potash market has weathered the monsoon rain deficit.
8In its latest presentation, the company says: “Vessels continue to arrive in India. 2 million tonnes of potash were imported to India in Jan-Jul 2014. Situation appears to be normalizing with the rain deficit. Potash inventory stays at 0.5 million tonnes vs. 1.1 million tonnes at the end of August 2013. India is expected to import 3.7-4.0 million tonnes this (calender) year.”
8Uralkali has articulated its outlook about Indian market in latest quarterly market analysis report. It observes: “The Indian market looks promising in terms of demand, despite concerns that the rainfall during monsoon season was insufficient this year. Potash demand was quite strong in the quarter due to high levels of NPK application and profitable import economics. A total of 2.4 million tonnes was imported during the first eight months of the year, representing a y-o-y increase of 31%. In the 2014 calendar year, India is expected to import 3.7-4.0 million tonnes.”
8Reviewing the global developments after it adopted a new strategy in July 2013, Uralkali says that potash industry has gone through the following developments:
“price stability boosted market confidence; affordable pricing stimulated potash consumption around the world and lower potash prices promoted rational decision making in relation to greenfield projects.”
8It adds: “The entire potash industry enjoyed a strong growth in 1H 2014. As a result, global potash sales in the first half of this year hit new highs - 33 million tonnes. Demand rebounded so strongly that some producers have indicated they are essentially sold out until end 3Q 2014.”
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CIL's cyclone-affected Vizag complex attains normal capacity utilization

Nov 21: Coromandel International Limited’s (CIL’s) cyclone-affected complex fertilizers production facility at Visakhapatnam is now back into normal operational mode.
8In a brief disclosure to the NSE and BSE, CIL said: “that the production at Visakhapatnam plant has now stabilized and the plant is operating at its normal capacity.”
8The complex had suspended its operations on 12th October with the arrival of Hudhud cyclone, which caused certain damage to the complex’s facilities.
8It had stared partial operations by end-October. As reported earlier, the company had indicated that the production during October-November period was expected to be lower than the normal operating capacity of the entire complex.
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Fert firms dither in sharing their experiences under environ licensing raj

Nov 20: The Fertilizer companies appear to be hesitant in putting on record their experience in securing environmental clearance from the Ministry of Environment and Forest.
8This is evident from Department of Fertilizes’ (DOF’s) reminder to all companies to submit their experiences as well as suggestions for simplifying procedures for environmental clearances
In a letter to all P&K and SSP companies, DOF has recalled its earlier missive dated 15th October 2014 on this subject and stated: “the requisite comments in the matter are still awaited.”
8The Letter adds: “you are once again requested to submit your comments/views in the matter up to 30.11.2014 for further examination.”
8As reported earlier, DOF had requested companies to report any specific instances of delay or harassment either by MOEF or by State Department of Environment or State Pollution Control Board.
Visit our report sections for the details.
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MFL's financial restructuring becomes uncertain

Nov 20: Madras Fertilizers Limited’s (MFL’s) financial restructuring is becoming uncertain if the disclosure made by the company in the footnotes to its Q2 results is any indication.
8In the footnotes, MFL says: “BIFR at its hearing held on 19.09.2013 directed the company and Govt. of India to expedite revival of the company within a period of three months. Next hearing, earlier scheduled on 13.01.2014, 19.03.2014, 16.06.2014 and 14.08.2014, has been postponed and the revised date of hearing is yet to be announced.”
8The company increased its net profit to Rs 23.61 crore in Q2 (July-September 2014) of current financial year from Rs 17.17 crore in the corresponding period of previous year.
8The company also increased its net sales to Rs 695.21 crore from Rs659.08 crore. This modest improvement in performance was achieved in spite of 24-days shut-down of complex fertilizers plant and 2-days shut-down of urea plant during the latest Q2.
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Modi Govt gives G20 commitment to unleash urea reforms

Nov 19: The NDA Government has expressed its resolve to undertake urea reforms at the G20 forum.
8It has included this ticklish issue in the first key commitment listed in the Comprehensive Growth Strategy: India’ (CGS). This report was presented at the G20 Leaders Summit that concluded in Brisbane on 16th November.
8Under the sub-heading ‘Macroeconomic Policy Response’, CGS says, “Fiscal sustainability by ensuring predictable and stable tax regime (with measures for reduced litigation and dispute resolution) and expenditure reforms (updating urea subsidy and setting expenditure management commission), and financial stability by formulating appropriate monetary policy framework.”
8It affirms: “new urea policy would also be formulated.” It has, however, not specified any timeline for announcement of the proposed policy.
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CIL to drive its sales with enhanced focus on customized fertilizers

Nov 18: Coromandel International Limited (CIL) would continue with its strategy to provide customized fertilizers to farmers as this has helped the farmers as well as increased its market share.
8The transcript of a recent conference call with investment analysts has quoted CIL Managing Director Kapil Mehan as saying: “As we have shared earlier our strategy is to give products which are suitable for farmers requirement and we formulate these products in different combination of NP&K. Of course, there are constraints of the fertilizer control order but we try to match the different needs, different farmer requirement, and different cropping pattern. So our stated strategy is to have products which are more customized to the farmers’ requirements and complex fertilizers are definitely more suited to farmers’ customized requirement as opposed to DAP.”
8He continued: “We keep promoting, and educating the farmers on use of complex fertilizers because they give better returns to the farmer; it helps us to improve our production rate also in the plant is the second benefit. So it is not entirely driven by higher margin or lower margin but basically we want to build our ‘Gromor’ brand which has very large and strong franchise amongst the farmers and that is what we would like to strengthen.”
8He added: “Coromandel is known as a complex fertilizer company and we
would like to build that position more and more and make it more stronger and you will be happy to note that this year we manage to increase our market share of complex from almost 24%-25% to 29% level. And that is our strategy and we will continue to drive that. So it is a part of a larger strategy than a response to a short term hiccups of phos acid availability or margin requirements.”
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Decline in urea consumption a positive sign: CIL

Nov 18: Coromandel International Limited (CIL) believes the imbalanced urea consumption pattern has perhaps started showing signs of correction without any policy intervention.
8At recent conference call with investment analysts, CIL Managing Director Kapil Mehan observed that the fertilizer market also has grown during the first six months of this year. The DAP sales has grown by 14.7% from 3.230 million tonnes to 3.705 million tonnes. Import is down by about half million tonnes from 2.49 tonnes to 1.94 million tonnes. With the result the closing stock with the industry as on end of September is pretty low at around 3 lakh tonnes. As regards complex fertilizers, import is down from 0.233 million tonnes last year to 0.202 million tonnes this year whereas production is up from 3.17 million tonnes to 3.47 million tonnes. And sales is up by 19% from 3.09 million tonnes to 3.68 million tonnes. MOP sales have also grown by 28.4% from 1.1 million tons to 1.41 million tonnes and SSP has grown by about 8.6% from 1.84 million tonnes to almost 2 million tonnes.
8He said: “Similarly if we look at urea sales, and that is a bit of a surprising number because sale is actually down 7.3% and that possibly is explained by the fact that farmers are now concerned about balanced fertilization and are not enamored only by price to apply more urea but they are also scientifically making sure that they give balanced nutrition to their crops. So I think that at least from a macro data perspective it is showing a positive sign. We have also seen in our interactions with the farmers that they are more careful about applying complexes as well as potash fertilizers; they are diversifying their fertilizer use so that there is no overdependence on one nutrient or the other.”
8He added: “So overall if we see the segments that we operate in, the sales have grown quite significantly and that is as per expectation because in my last call also we had indicated the sales will show increases primarily because the pipeline inventory is now coming to normal levels; fresh demand will be met through fresh sales and that is what has happened through the quarter as well as through the first half of the year.”
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NFCL's Q2 net loss soars due to non-supply of gas

Nov 17: Nagarjuna Fertilizers and Chemicals Limited (NFCL) has suffered higher net loss in the second quarter of current financial year due to about two-month plant shut-down due to non-supply of gas.
8The net loss shot up to Rs 102.85 crore in Q2 (July-September 2014) from Rs 46.17 crore in the corresponding period of previous year. The net sales plummeted to Rs 458.34 crore from Rs 1122.56 crore.
8In the footnotes to the results, NFCL said: “Consequent to the blast in gas pipeline of GAIL on June 27, 2014, the plants were shut down due to non supply of Gas. In view of non supply of Gas and also lower supply of Gas during the quarter the Company has incurred losses due to lower production and sales. The plants commenced production in a phased manner from 16th August 2014.”
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Nov 17: Global urea & DAP prices settle in placid zone   Details
Nov 14: MCFL enhances its Q2 net profit by 351.32%   Details
Nov 14: RCF boosts its Q2 net profit by 93.63 %   Details
Nov 13: DSL's urea business & NBS segment boost their respective Q2profit   Details
Nov 13: NFL further improves its profitability post plants revamp   Details
Nov 12: EntABNL's urea business boosts its Q2 operating profit following debottlenecking   Details
 
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