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Tuesday, June 02, 2020

Agriculture an exception, fertiliser sales jump 45% in April despite lockdown

Lockdown makes no difference to demand, as nutrient sales posts sixth consecutive month of double-digit growth

Written by Harish Damodaran | New Delhi | Updated: May 4, 2020 11:57:20 am
coronavirus, coronavirus impact on farners, agriculture sector, Indian fertiliser industry, Indian monsoon, Indian farmers, fertiliser sale in India, The most important thing at the end of day, though, is that the farmer wants fertiliser and seed. There is no certainly shortage of demand here, which might not be so with cars and two-wheelers. (File photo)

Auto companies posted zero domestic sales of cars and two-wheelers in April, as manufacturing plants and dealer showrooms remained closed due to the nationwide lockdown. The same month, however, saw retail sales of fertiliser zoom by 45.1 per cent year-on-year.

Data from the Department of Fertilisers shows all-India nutrient sales at 20.56 lakh tonnes (lt) in April 2020, as against 14.17 lt in April 2019 and 12.96 lt in April 2018. The annual sales growth in April was 36.2 per cent for urea (10.95 lt versus 8.04 lt in April 2019), 71.7 per cent for di-ammonium phosphate (2.97 lt versus 1.73 lt), 81.4 per cent for nitrogen-phosphorous-potash-sulphur complex fertilisers (3.9 lt versus 2.15 lt), 43 per cent for muriate of potash (1.33 lt versus 0.93 lt), 5.6 per cent for single super phosphate (1.31 lt versus 1.24 lt) and 37.5 per cent for compost (0.11 lt versus 0.08 lt).

The 45.1 per cent year-on-year sales jump in April does not seem a one-off phenomenon. As the accompanying table shows, every month from November has registered double-digit growth in retail fertiliser sales.

“The rabi (winter-spring) season was great for us because of an extended monsoon, which led to groundwater tables getting recharged and reservoirs being filled to near capacity. Farmers, therefore, planted more area. They now want to utilise the substantially improved soil moisture for the ensuing kharif season as well, which is reflected in the April sales,” said a fertiliser industry official.

Lockdown has clearly not impacted nutrient sales, partly because of agricultural inputs being exempted from any movement, distribution or retailing restrictions. If anything, it may have helped.

“Just as with the panic buying we saw for foodstuffs, dealers wanted to stock up in anticipation of kharif demand. We normally supply on 2-2.5 months credit to enable sales that peak only after June, but they actually lifted material on cash this time. Also, they feared that the rupee’s weakening may cause prices of imported fertilisers and inputs to go up in the coming months,” the official added.

It is not only fertilisers; demand for seed is also seen to be high. Till a couple of weeks back, there was concern over availability of seed, especially for cotton whose sowing has just started in Punjab, Haryana and north Rajasthan. Much of hybrid paddy, maize and cotton seed production is concentrated in the southern states. As The Indian Express had earlier reported (https://bit.ly/2VWmXZ2), both processing and transport of seeds to the consuming centres had been hit by the non-availability of labour and trucks.

“Seed processing plants are still operating at about 60 per cent capacity on account of labour shortages. But transportation issues have been significantly sorted out, particularly with the Railways stepping in. Out of the estimated 90 lakh packets requirement of cotton seeds for Northwest India, 50-60 lakh have been moved in rail wagons from Salem (Tamil Nadu) to Bhatinda (Punjab). The rest have been delivered by trucks well in time for sowing,” noted Ram Kaundinya, director-general, Federation of Seed Industry of India.

Nursery sowings of paddy will begin in Punjab and Haryana after mid-May, while kharif plantings in the rest of India will take off with the monsoon’s arrival in June. According to Kaundinya, transport of vegetable seeds – which takes place in 40-50 kg packets through surface courier services, as opposed to truck or wagon loads for others – continues to face bottlenecks, “but the overall situation is much better than what it was two weeks ago”.

The most important thing at the end of day, though, is that the farmer wants fertiliser and seed. There is certainly no shortage of demand here, which might not be so with cars and two-wheelers.

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