India to provide 30,000 tonnes of urea to Nepal

March 21, 2017

The Kathmandu Post, 18th March 2017

India has agreed to provide 30,000 tonnes of urea following Nepal’s request to prevent a shortage during the spring planting season, Agriculture Inputs Company (AIC) said.

Farmers require 61,000 tonnes of the vital farm input to plant their spring crops during the mid-March to mid-June season. The country has only 5,653 tonnes of urea currently, 4,213 tonnes with AIC and the rest with Salt Trading Corporation.

However, there are adequate stocks of diammonium phosphate (DAP) for the spring season, AIC said.

Amar Raj Khair, managing director of AIC, said they were in the final stages of importing 30,000 tonnes of urea from Brahmaputra Valley Fertilizer Corporation in Assam, India. The Indian government will be providing the fertilizer at the import parity price, he said.

In the beginning of February, the government had formally requested the Indian Ministry of External Affairs to provide 30,000 tonnes of urea in order to prevent a possible shortage of the farm input.

Under a Nepal-India treaty signed in 2009, India has agreed to sell 100,000 tonnes of chemical fertilizers (60,000 tonnes of urea and 40,000 tonnes of DAP) to Nepal annually at the import parity price to avoid procedural hassles.

It normally takes six months to procure chemical fertilizers following a global tender call under the Public Procurement Act.

AIC faced a deficit of urea as UAE-based Commodities Trading Company, which had bagged the contract to supply 25,000 tonnes of fertilizer, reneged on the deal after prices jumped $25 per tonne in the global market.

Likewise, Salt Trading Corporation was forced to cancel the contract with the supplier after it failed to supply urea within the stipulated time.

Fertilizer shortages are likely to occur at a time when the government has announced spring paddy mission from this fiscal year to boost production.

The country’s paddy acreage stands at 1.55 million hectares. However, spring paddy is planted on only 112,000 hectares. The government has planned to increase the spring crop acreage to 300,000 hectares.

Most farmers do not prefer spring paddy which has a larger grain. However, its productivity is higher than regular paddy. According to the Ministry of Agricultural Development, the productivity of spring paddy is 4 tonnes per hectare compared to 3.17 tonnes for regular paddy.

Nepal recorded the largest paddy harvest in history this fiscal year. According to the ministry’s statistics, paddy output jumped 21.66 percent to 5.23 million tonnes this fiscal year due to an above average monsoon after two consecutive years of falling harvests triggered by drought.