Fertiliser Industries On A Downward Trend: Pinning Hopes on the Rain God
Fertiliser Industries On A Downward Trend: Pinning Hopes on the Rain God
The fertiliser industry in India is no stranger to the vagaries of the Indian monsoon. Add a possible El Nino effect and the negative impact of climate change induced by global warming and you have the perfect storm. There is simply no help for it. While the fertiliser industry continues to pin its hopes on a bountiful monsoon this year to arrest declining sales, the future looks to be far from bright for them. With the Indian meterological department predicting less than perfect conditions this year and global scientists coming up with climate change models that are anything but optimistic, tough times seem to be ahead for the Indian fertiliser industry.
According to provisional estimates provided by the Fertiliser Association of Indian, total sale of nutrients fell by 5% to 51.23 million tonnes since last year in the year 2013-2014. This is a dismal state of affairs considering that there was record food grain production in the country, according to the figures provided by the government agencies. Urea sales grew by less than a percent to 30.45 mt during the year as compared to a fall by one-fourth as far as DAP ( di-ammonium phosphate) sales are concerned.
The sales of nitrogen/nitrogen potassium nutrieints fell to 2.32% whereas muriate of potash increased only marginally. Urea imports fell steadily by 12% during the last year at around 7 million tonnes over last year. DAP imports fell by 43%. While there were clearly lower sales, actual consumption by experts was estimated to be higher.
Stocks that had built in the pipeline were used. Lower opening stocks helped to boost sales. Sales might improve this year if the weather Gods oblige. But the Gods may be less than forthcoming according to current estimates by scientists. Rainfall patterns have already experienced a major distrubance in Kerala which is the gateway to the monsoon in South east Asia.
A recent research finding by scientists from Stanford University also found that weather patterns are changing and monsoons are characterized by extreme highs and lows. This will not only damage crops and lead to crop failure, it will also mar the prospects of the fertiliser industry which is already reeling under shocks caused by low profits.
The timely arrival of the Indian monsoon and its even disbursement are 2 very important factors that influence the health of the fertiliser industry. While researchers and scientists are saying it is too soon to conclude what the monsoons will bring, it is clear that the IMD has stated monsoon will be below normal this year.
Fertiliser companies are also entering into important import contracts with firms from other nations. While this is a positive step, what would have been ideal is that the monsoons would have been normal for this year, resulting in good yields for the farmer and the fertiliser industry.
It is too soon to say what will happen with certainty. But the Indian farmer and fertiliser industry alike would have benefited greatly if proper irrigation systems would have been in place to protect crops from damage in the event of a dry monsoon. What would also be of great value is increased awareness about how businesses and citizens alike need to swtich to renewable energy and aim to reduce the emission of greenhouse gases releasing into the atmosphere which is causing the menace in the first place.
