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PwC report moots tie-ups between fert & other agri-input firms

Nov 28: A report released by PricewaterhouseCoopers (PwC) has pitched for tie-ups between fertilizer and other crop-input companies and for precision farming to ramp up farm yields.
8According to the report captioned ‘Future of India – The Winning Leap’, “partnerships between complementary input players—such as fertiliser, pesticide, and seed companies—will strengthen the agricultural supply chain. That could reduce costs of inputs for farmers and give them easier access to inputs, all of which translates into better performance on agricultural yield.”
8It says that the agricultural sector offers a rich array of opportunities for private sector companies to help India achieve its agricultural yield targets. Such companies could come from sectors ranging from IT, retail, and biotechnology to fertilisers and farm-equipment manufacturing.
8It adds: “Take agriculture, the use of big data and analytics in precision farming can improve the quality and quantity of crop yields, and reduce production costs. It also helps reduce the use of fertiliser and pesticides, prevents soil degradation, and optimises water use. Around the world, precision farming is carried out in tandem with modern farming practices and technologies, including satellite imagery and IT-enabled solutions.”
8As put by the report, “India could benefit hugely by increasing yield for food grains from 4 tonnes per hectare in 201217 to 5.4 tonnes per hectare in 2024 and 7.4 tonnes per hectare in 2034.”
Reaching these goals will require improvements in irrigation, farmer education, and access to inputs such as fertilisers and good-quality seeds, it observes.
8India’s agricultural sector needs to shift toward data-driven precision farming—which uses sensors, imagery, and other technologies to generate information for farmers about weather, soil content, fertiliser, and pesticide levels. Farmers use the information to fine-tune their techniques as well as optimise resources and improve the quality and quantity of crops. Yet only 2.5m of India’s 120m farmers practise precision farming, largely in the form of drip irrigation, it says.
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CIL attains strong liquidity position in spite of challenging environment

Nov 27: Coromandel International Limited (CIL) has substantially improved its liquidity position notwithstanding tough market conditions and persisting subsidy woes.
8While affirming the company’s credit rating and reckoning its stable outlook, India Ratings & Research (Ind-Ra) has factored in CIL’s comfortable liquidity position with cash and cash equivalent being Rs 4.1 billion against a debt repayment commitment during the next 12months of Rs 1.7 billion at the end of 2013-14.
8Ind-Ra says: “CIL’s free cash flow improved further in FY14 to INR9.9bn (FY13: INR4.3bn; FY12: negative INR4.3bn) due to the improvement in working capital cycle and a fall in subsidy receivable to INR11.2bn (INR13.7bn; INR16.3bn). Ind-Ra expects the free cash flow to remain strong, given the company’s cash generating ability and in absence of large capex plans. CIL also has financial flexibility by virtue of being a part of the large Murugappa Group.”
8According to Ind-Ra’s release, “The Company’s market position is reinforced by the increase in its capacity for phosphatic fertilisers to 3.625mmtpa post completion of a new plant in Kakinada, when the country is facing a demand-supply mismatch. India meets about 50% of its phosphatic and complex fertiliser demand through imports. The completion of the new phosphoric acid plant in Tunisia would provide adequate supply of raw material (phosphoric acid) for the expanded capacity, which would be sufficient to meet about 18%-20% of CIL’s overall phosphoric acid requirements.”
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DOF vetting Finance Ministry's advice to alter subsidy payment system

Nov 27: The Department of Fertilizers (DOF) is studying Finance Ministry’s suggestion to reform the present online subsidy payment mechanism for different fertilizers.
8Answering a question on this issue and rail rake points in Lok Sabha, the Minister of State for Chemicals and Fertilisers Ananth Kumar said: “Regarding proposal of Ministry of Finance on rationalization of subsidy disbursal system it is stated that while conveying ex-post facto approval for having implemented the SBA during 2013-14, the Department of Expenditure, Ministry of Finance advised on rationalizing the on account payment system for various grades of fertilizers. The suggestion of the Department of Expenditure is under examination in the Department of Fertilizers.”
8Replying to another question, Mr. Kumar listed measures to keep prices of decontrolled fertilizers under check.
8He said DOF has appointed cost auditors to scrutinize the mandatory cost data submitted by fertilizer companies on six monthly basis from 2012-13 onwards.
8The Minister added: “It has also been stipulated in the provisions, that in cases, where after scrutiny, unreasonableness of MRP is established or where there is no correlation between the cost of production or acquisition and the MRP printed on the bags, the subsidy would be restricted or denied even if the product is otherwise eligible for subsidy under NBS Scheme. In proven case of abuse of subsidy mechanism, the Department of Fertilizers, on the recommendation of Inter.
8Ministerial Committee may exclude any grade/grades of fertilizers of a particular company or the fertilizer company itself from the NBS Scheme.”
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DOF seeks industry's help in giving inputs for mid-year econ analysis

Nov 26: The Department of Fertilizers (DOF) is seeking help of the fertilizer industry in submission of inputs for Mid-Year Economic Analysis 2014-2015 (MYEA) being prepared by the Finance Ministry.
8In a communication to fertilizer companies, DOF has sought information from them regarding targets, achievements and initiatives for the first half of current financial year.
8Apart from disclosing the concerns faced by them during this period, the companies are also required to indicate the outlook for the rest of the year.
8The information is to be furnished in tabular format separately for urea, diammonium phosphate (DAP), single super phosphate (SSP) and other products.
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RSMM to E-auction of 44,000 tonnes of rock phosphate

Nov 26: Rajasthan State Mines & Minerals Limited (RSMM) has offered to E-auction 44,000 tonnes of rock phosphate on 2nd December for supply during 6th-31st December 2014.
8Of the total offered quantity, 32,000 tonnes would be 31.5% crushed rockphosphate (CRP) and the balance 12,000 tonnes would be 31.54% P2O5 beneficiated rockphosphate (BRP).
8As in the previous bidding competition, the starting price for bidding would be Rs 6000 per tonne. The tendering competition is limited to indigenous users of rock phosphate and domestic traders.
8The E-auction of rock phosphate extracted from Jhamarkotra mines located in Udaipur district of Rajasthan would be conducted by MSTC.
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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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Nov 20: MFL's financial restructuring becomes uncertain   Details
Nov 19: Modi Govt gives G20 commitment to unleash urea reforms   Details
Nov 18: CIL to drive its sales with enhanced focus on customized fertilizers   Details
Nov 18: Decline in urea consumption a positive sign: CIL   Details
Nov 17: NFCL's Q2 net loss soars due to non-supply of gas   Details
Nov 17: Global urea & DAP prices settle in placid zone   Details

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