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Monsoon revival perks up fertilizer market prospects: PotashCorp

Sept 19: Canada’s Potash Corporation (PotashCorp) is exuding optimum about pick-up in the demand for fertilizers in India following late revival of the monsoon.
8In its quarterly market analysis report (MAR) dated 18 September 2014, the company observes: “The recent revival of the monsoon rains has improved buyer sentiment in India and fertilizer sales have picked up, with potash arrivals outpacing the previous year’s level. Indian potash consumption is expected to be higher in 2014 as retail prices have stabilized, but application rates are still well below scientifically recommended levels.”
8The slow start to the monsoon season impacted fertilizer demand in some regions at the beginning of the fertilizer year. However, phosphate and potash sales have increased more recently with better moisture conditions.
MAR says: “We anticipate consumption of both nutrients will be higher during the current fertilizer year compared to the very low levels of recent years.”
8It adds: “Reports indicate the new government could implement policies favorable for agriculture sector growth and the fertilizer industry. While no specific changes have been announced, we believe a renewed focus on improving the health and productivity of India’s soils will be a key long-term driver of potash demand.”
8According to MAR, “India continues to rely heavily on imported urea as production fundamentals in the country remain constrained. It is in the midst of importing significant volumes of urea as a noteworthy tender closed after the late monsoon season commenced.”
8It notes: “Indian DAP demand was slow to emerge in the first half of 2014 due to uncertainty over subsidy levels and a slow start to the monsoon season. States in central and northwest India, which traditionally consume the largest volumes of DAP for the Kharif planting season, received low rainfall early in the monsoon season. The recent recovery of the monsoon has increased late-season Kharif demand and holds promise for the Rabi planting season. With demand improving and import purchases delayed, Indian DAP supply could be tight through the remainder of the year.”
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DOF moots strategy to optimize fertilizers usage

Sept 19: The Department of Fertilizers (DOF) has proposed a medium-term strategy to optimize the application of fertilizers and returns from it.
8The strategy should provide for optimal dose based use of fertilizers on the basis of soil health status and promote use of neem-coated urea, according to a presentation by Secretary (Fertilizers) at the two-day Rabi conference that concluded yesterday.
8The three other elements of the proposed strategy are: promotion of micronutrients, organic fertilizers and water soluble fertilizer under National Horticulture Mission.
8The disturbing factors in the existing scenario include depleting soil organic matter; imbalance in fertilizer use; emerging multi-nutrient deficiencies; declining nutrient use efficiency; declining crop response ratio and negative soil nutrient balance.
8The presentation says that the fertilizer response ratio in irrigated areas has declined from 13.4 kg of grain/one kg of NPK dose in 1960 to 3.7 kg of grain/one kg of NPK due to factors such as inadequate and imbalanced fertiliser use.
8The other reasons for this trend are: increasing multi-nutrient deficiency' lack of farmers awareness about balanced plant nutrition and poor crop management. As put by the presentation, “Excess fertiliser dose (should) not be the substitute of poor management”.
8It says that 67% of the country's soils are having lower organic carbon.
8The operational issues raised in the presentation are: “Quality Control & Enforcement of FCO mandated standards; strengthening of the enforcement measures to prevent hoarding/ black marketing/ smuggling /diversion of subsidised fertilizers to non-agriculture use; operationalisation of mFMS at the retailer level.; close coordination with suppliers and timely placement of indent with Railways and collaboration in the pilot project for tracking & tracing of fertilizers sales.”
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CFCL starts evaluating opportunities in its non-core businesses

Sept 18: Chambal Fertilisers and Chemicals Limited (CFCL) is taking a fresh looking at opportunities in its non-core businesses that include shipping, textiles and information technology.
8In a brief disclosure to the BSE, Mumbai, the company today stated that it has “constituted a committee of the Board of Directors to evaluate the opportunities in non-core businesses of the Company. The Board has also authorized the said committee to appoint legal, tax, financial and other consultants for the aforesaid purpose and give its recommendations.”
8It adds: “Subsequently, the said committee in its meeting of even date has appointed a merchant banker to advise the committee into the aforesaid matter.”
8It is not clear whether the latest initiative is applicable to shipping or to any non-core business segment.
8As reported earlier, the company had abandoned in October 2011 the proposed de-merger of its shipping division, citing debt restructuring glitches.
8In March 2011, CFCL had appointed independent consultants to explore various options for restructuring its shipping business.
8In 2005, CFCL had merged the loss-incurring India Steamship Company Limited (ISCL) with itself with retrospective effective from September 2004 to fund the latter’s growth plans.

CFCL starts evaluating opportunities in its non-core businesses

Sept 18: Chambal Fertilisers and Chemicals Limited (CFCL) is taking a fresh looking at opportunities in its non-core businesses that include shipping, textiles and information technology.
8In a brief disclosure to the BSE, Mumbai, the company today stated that it has “constituted a committee of the Board of Directors to evaluate the opportunities in non-core businesses of the Company. The Board has also authorized the said committee to appoint legal, tax, financial and other consultants for the aforesaid purpose and give its recommendations.”
8It adds: “Subsequently, the said committee in its meeting of even date has appointed a merchant banker to advise the committee into the aforesaid matter.”
8It is not clear whether the latest initiative is applicable to shipping or to any non-core business segment.
8As reported earlier, the company had abandoned in October 2011 the proposed de-merger of its shipping division, citing debt restructuring glitches.
8In March 2011, CFCL had appointed independent consultants to explore various options for restructuring its shipping business.
8In 2005, CFCL had merged the loss-incurring India Steamship Company Limited (ISCL) with itself with retrospective effective from September 2004 to fund the latter’s growth plans.
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BEC set to commission its SSP plant in Gujarat in December 2014

Sept 18: BEC Fertilizers Limited (BFL) is gearing up to commission its Rs.107.41-crore single super phosphate (SSP) plant in Bharuch district of Gujarat in December 2014.
8According to Credit Analysis & Research Limited (Care Ratings), “The proposed plant will have an installed capacity of 3.30 lakh TPA of SSP (in powder form). Furthermore, it also proposes to convert part of the powder SSP to value-added Granulated SSP with an installed capacity of 1.65 lakh TPA.”
8In its credit rating release, Care Rating observes: “Ability of BFL to timely complete the project without any significant cost overrun and thereby generate sufficient accruals as envisaged are the key rating sensitivities.”
8BFL was originally incorporated in September 2006 under the name BEC Ispat Private Limited, (later converted into BFL in 2011) by Mr Veenu Jain, Mr Viren Jain and Mr Arjun Jain. The company is part of the BEC group (with the flagship company viz. Bhilai Engineering Corporation Limited) which has presence across diversified business viz. engineering [manufacturing of high precision equipment’s catering mainly to railways, power, defense and metals & minerals industry], fertilizers, agro chemicals and food products, it says.
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RCF develops phosgypsum-derived soil ameliorant & a K-biofertilzier

Sept 17: Rashtriya Chemicals and Fertilisers Limited (RCF) has developed two value-added products from Phosphogypsum and a potash-mobilizing biofertilizer, according to its annual report for 2013-14.
8The report says that the company has developed “a new product for enhancing organic matter in sodiac and saline soils by using Phosphogypsum. The product, named as ‘Gypsum-Sona’ is found to have soil rejuvenating characteristics and also increases crop yield manifold. Pilot scale production is completed and is sent for field trials. The field trials have shown promising results and the product is expected to be commercialized in the coming year.”
8RCF’s R & D department has also developed, in consultation with Institute of Chemical Technology, a formulation for manufacturing an eco-friendly “External wall plaster” from Calcined Gypsum. The product is undergoing further tests and after successful trials, would be taken up for commercial production. Your Company has also developed another formulation using the Calcined Gypsum, for manufacturing a Cement Bonding Material, similar to Cement mortar, which can be used on roads etc., to fill potholes.
8It has also undertaken laboratory scale development of Potassium (K) mobilizers as a biofertilizer.
8The Report explains: “Microorganisms play a key role in the natural K cycle and are capable of mobilizing available K in the soils. They are functionally more useful and environmentally more feasible than soluble K. The special focus on K mobilizers/solubilizers is due to the fact that K is one of the major nutrients required by all crops. The biofertilizer with K mobilizing bacteria is developed in laboratory and is sent to Madurai University for field trials. Your Company will take further steps to commercialise the product after successfully completing the field trials.”
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Urea Investment Policy hitch hits RCF Thal Expansion

Sept 17: The delay in the implementation of new urea investment policy has cast its shadow over Rashtriya Chemicals and Fertilisers Limited’s (RCF’s) Thal phase-III expansion project.
8The company has disclosed this in its annual report for 2013-14. It says: “Your Company has plans to expand the capacity of Urea at Thal by setting up one single stream ammonia plant of capacity 2200 MTPD and one single stream urea plant of capacity 3850 MTPD at the existing site at apprx. cost of Rs 4500 crore. The selection process for lump sum turnkey contractors (LSTK) for main plants had been completed last year and subsequently proposal for approval of PIB/CCEA was already submitted.”
8The report continues: “In view of delay in policy notifications and considerable lapse of time thereof, LSTK bidder has not agreed for extension of bid validity beyond 31.03.2014. Your Company will make fresh proposal after seeking fresh bids from LSTK vendors.”
8RCF has also initiated steps to wind up the subsidiary Company, Rajasthan Rashtriya Chemicals and Fertilizers Ltd (RCFL). This entity has remained non-operational and there is no scope for establishing the intended business for which it was formed.
8As reported earlier, RRCF was conceived as a joint venture between RCF and Rajasthan State Mines & Minerals Limited (RSMML) to set up diammonium phosphate (DAP) project in Rajasthan. As the project was aborted, RRCF explored the prospects of setting up a single super phosphate (SSP) plant. This proposal also did not take off.
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RSMM to E-auction of 60,000 tonnes of rock phosphate

Sept 16: Rajasthan State Mines & Minerals Limited (RSMM) would E-auction 60,000 tonnes of rock phosphate on 24th September for supply during October to 15th November 2014.
8The starting price for bidding would be Rs 6000 per tonne. The tendering competition is limited to indigenous users of rock phosphate and domestic traders.
Of the total offered quantity, 40,000 tonnes would be 31.5% crushed rockphosphate (CRP) and the balance 20,000 tonnes would be 31.54% P2O5 beneficiated rockphosphate (BRP). Minimum quantity and incremental quantity for CRP is 200 tonnes and for BRP is 100 tonnes. Incremental quantity for CRP is 100 tonnes and for BRO 50 tonnes.
8The E-auction of rock phosphate extracted from Jhamarkotra mines located in Udaipur district of Rajasthan would be conducted by MSTC, a Central Government enterprise.
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DAC unveils a new multi-facet mobile-based advisory & information service for farmers

Sept 16: The Department of Agriculture and Cooperation (DAC) has developed a new website for provision of several mobile-based services to farmers and other stakeholders.
8According to a presentation on the new service that integrates elements of earlier SMS service and different official farm websites, the services provided by new facility include information on soil health card, fertilizer market information, subsidy information, dealer licensing etc.
8According to DAC, "Mobile based services for farmers and other stakeholders being delivered through organisations, departments and offices of Central & State Govts down to the Block level (including State Agriculture Universities, Krishi Vigyan Kendras, Agro-Meteorological Field Units) have been brought together under a single umbrella viz. mKisan portal of the Ministry of Agriculture, Government of India. The URL is www.mkisan.gov.in. mKisan Portal subsumes all mobile based initiatives in the field of Agriculture & allied sectors. It brings together SMS (both Push and Pull), Interactive Voice Response System, Unstructured Supplementary Services of Data or USSD (which is essentially Interactive SMS and can facilitate data entry and query on Web Portals without internet), Mobile Apps and Services. Further details of mKsan Portal can be seen at
http://mkisan.gov.in/aboutmkisan.aspx."
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FACT seeks bids for supply of 120,000 tonnes of ammonia

Sept 15: Fertilisers and Chemicals Travancore Limited (FACT) has invited tenders for delivery of 120,000 tonnes of anhydrous ammonia at Kochi for manufacture of fertilizers.
8According to the tender document, “FACT intends to import about 1,20,000 MT of Ammonia in shipments of 7500MT+/-5% each for a period of 6 months from the date of award of contract. The contract is extendable up to one year at FACT’s option. The shipment schedule depends upon factors such as ullage at cochin port, movement from Cochin port to plants etc.”
8The tender document says: “FACT intends to avail credit up to 180 days from the B/L date. Bidders shall offer credit up to 180 days and indicate the applicable rate of premium for the credit period of 180 days per annum in the Price Bid Format. In case the bidder has not offered 180 days credit or has offered credit for a period shorter than 180 days, a premium @ 14% per annum for the balance period up to 180 days shall also be loaded for evaluation.”
8It adds: “Shipment schedule will be as per indication to be furnished to the supplier considering ullage at Cochin port, Movement from Cochin port to plants etc. Supplier has to arrange delivery of the material at Cochin Port within 30 days from the date of confirmation by FACT as per arrival laycan at Cochin.”
8The last date for submission of tenders is 22nd September 2014.
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MP's Markfed invites tenders for supply of eight fertilizers during Rabi

Sept 15: The Madhya Pradesh State Cooperative Marketing Federation Ltd (Markfed) is seeking offers for supply of four commodity fertilizers and four grades of NPK fertilizers during the forthcoming Rabi season beginning 1 October 2014 and ending 31st march 2015.
8The four bulk fertilizers and their requisite quantities are: 350,000 tonnes of diammonium phosphate, 300,000 tonnes of single superphosphate and 30,000 tonnes of muriate of potash and 3000 tonnes of ammonium sulphate.
8As for complex fertilizers, Marfed has asked for 80,000 tonnnes of NPK (12.32.16) grade., 30,000 tonnes of NPK (10.26.26) grade and 15,000 tonnes of two other grades combined.
8The bidders are required to submit separate offer for each product. The last date for submission of offers is 23rd September 2014.
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DOF seeks EOIs for Barcode-based tracking of all fertilizer bags

Sept 12: The Department of Fertilizers (DOF) has invited Expression of Interest (EoI) from eligible entities for implementation of barcode-based Fertilizer Track & Trace Solution (FTTS) to prevent subsidy leakages.
8At present, 100 crore fertilizer bags each weighing 50 kg pass through the supply chain every year. The supply chain includes 1.5 lakh retail outlets.
8As put by EOI document, “DoF envisages a tracking system where each bag of fertilizer supplied, which is eligible for government subsidy, can be traced across the supply chain points. The subsidy to be paid by the government will be linked with the scanning of fertilizer bag at wholesalers/retailer end. This would introduce transparency in fertilizer chain by near real-time data flow related to fertilizer bags dispatched, traced at intermediate check points and finally tracking the bag till the end point of sale. Each fertilizer bag will be tagged with a barcode at the manufacturing site/port. The fertilizer bag then will be scanned at certain number of pre-defined locations during the movement from plant/port to the retailer’s outlet. These locations may include manufacturers/port dispatch point, district warehouse, wholesaler’s and retailer’s receipt & sales point (s).”
8The information pertaining to the bag’s movement would need to be steamed to a centralized application.
8The tracking of fertilizer bags with Barcode based Supply Chain Management System ( FSCTS) project is envisaged to be implemented on BOOT (Build, Own, Operate, Transfer) basis initially for a period of 5 years extendable up to another 2 years.
8During the BOOT period, the successful bidder will own and operate the FSCTS and will be paid for the services based on the last mile receipt / sale of each fertilizer bag.
8At the end of the BOOT period, the successful bidder must transfer the complete infrastructure of FSCTS, including the hardware, software, barcode scanners and data centre infrastructure, at the notional cost of Rs 1 to DoF in order to keep the implemented system fully operational.
8DOF says: “Implementation of FSCTS will help DoF to estimate the availability of fertilizers at each sale point and enable DoF for better planning and movement of the fertilizers to the state / districts.
8FSCTS would also be able to check leakages and pilferages of fertilizers to non-agricultural sectors by providing real-time abnormal sales reports with certain retailers, it adds.
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Sept 12: RCF seeks offers for undertaking bentonite sulphur market study   Details
Sept 11: MMTC solicits offers for urea supply for meeting Rabi?s demand   Details
Sept 11: RCF gears up for potash imports   Details
Sept 11: DOF issues fresh advisory on analysis of Egyptian rock phosphate   Details
Sept 11: Point Counter Point-I: AOGO lobbies hard for gas price increase   Details
 
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