Ministry of Chemicals and Fertilizers Dismisses Claims of Shortage of DAP; MRP Maintained at ₹1350
28 October 2024, New Delhi: The Ministry of Chemicals and Fertilizers has issued a detailed clarification in response to recent media reports suggesting a shortage of Diammonium Phosphate (DAP) and speculating about its potential impact on the upcoming Rabi season. According to the Ministry, these reports are unfounded, misrepresenting the actual situation regarding both DAP availability and pricing.
The Ministry clarified that, despite fluctuations in international markets, the Maximum Retail Price (MRP) of DAP remains steady at ₹1,350 per 50 kg bag, a level maintained since the Covid-19 period. The government has taken steps to ensure no reduction in subsidy on DAP; in fact, subsidies have been increased for Rabi 2024 through two significant Cabinet decisions. These measures, the Ministry noted, have been implemented specifically to benefit farmers and to ensure consistent DAP availability throughout the country.
As part of this initiative, a special subsidy package of ₹3,500 per metric tonne, totaling ₹2,625 crore, has been introduced. This package is intended to stabilize procurement costs for fertilizer companies, helping them to manage price volatility in international markets without affecting their ability to maintain supply levels. Additionally, the subsidy has been linked to global market prices, meaning that if international procurement costs rise, fertilizer companies will still be able to secure supplies without passing those costs onto the farmers. Consequently, the Ministry assured, farmers remain the ultimate beneficiaries of these adjustments.
The Ministry also increased the budget allocation for Rabi 2024-25, raising it to ₹24,475 crore. This expanded budget will further strengthen DAP availability and provide additional security against potential supply fluctuations throughout the Rabi season.
In acknowledging certain geopolitical factors that have impacted DAP supplies, the Ministry cited challenges such as longer shipping routes being used due to rerouting via the Cape of Good Hope instead of the Red Sea. However, the Department of Fertilizers has implemented substantial measures to address these issues and is actively working to enhance DAP availability during the peak season from September to November 2024.
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