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Rating agency ICRA has termed the government's decision to provide a special one-time package for extra subsidy on Di-Ammonium Phosphate (DAP) fertiliser as positive for farmers as well as the industry as it will ensure farmers get access to fertilisers at a reasonable retail price and the industry also does not face losses on account of the elevated international prices of fertilisers and key inputs. It also said the availability of key nutrients will improve in the coming months.

the step will provided succour to the industry as the phosphatic fertiliser players had been incurring losses on the sale of DAP due to which the stocks had dipped and availability to farmers had become an issue. As per ICRA’s estimates, the industry will be making marginal profit on sale of DAP while NPK sales are expected to provide decent level of profitability in the upcoming rabi season.

With the increase in the subsidy on these key grades of phosphatic fertilisers, the rating agency expects decent level of profitability for phosphatic fertiliser players. As a result, DAP imports and manufacturing of complex grades is expected to rise going forward ensuring better availability of the same for the upcoming rabi season.