No fear of fertiliser shortage, AIC says

May 24, 2018

The Kathmandu Post, 24 May 2018

Farmers will not face a shortage of chemical fertilisers during this paddy planting season although imports are expected to drop due to rising prices in the international market, state-owned Agriculture Inputs Company (AIC) said.


The paddy cultivation period has begun in the hills and mountain areas while it normally begins in the first week of June in the Tarai. The government procured a record 330,000 tonnes of chemical fertiliser last year due to a fall in global prices. Prices started rising at the beginning of the year, prompting AIC to cut back on imports, company officials said.

“There is no cause for worry. Our stocks and fertiliser on order will last for at least three months from early June when demand soars,” said Bishnu Prasad Pokhrel, manager at the Procurement Department of AIC. He added that AIC had 35,000 tonnes of urea in its warehouses and a shipment of another 43,000 tonnes would arrive within 15 days.


Similarly, AIC said it had 23,000 tonnes of diammonium phosphate (DAP) in stock and another 20,000 tonnes was expected to be delivered soon. “We can supply urea for at least three months until mid-September. However, we are likely to face a slight shortage of DAP if the monsoon is good,” he said.


A good monsoon means the paddy acreage will increase and farmers will apply more fertiliser to boost productivity. Nepal is likely to witness a ‘normal’ monsoon this year, a precursor to higher summer crop output and economic growth. The consensus statement of the 12th session of the South Asian Climate Outlook Forum (Sascof) released in April says most of South Asia, including Nepal, is most likely to receive normal rainfall during the monsoon, which extends from June to September.


Although chemical fertiliser imports in terms of quantity are expected to drop this year, Nepal is likely to witness record imports in terms of value. The Trade and Export Promotion Centre’s figures show that the value of fertiliser imports in the first nine months of the current fiscal year (mid-July to mid-April) jumped 80 percent to Rs11.80 billion.


The Agriculture Ministry’s statistics show that the distribution of chemical fertiliser reached an all-time high of 298,677 tonnes in 2014-15. During that year, the average fertiliser consumption was recorded at 96.63 kg per hectare, the highest consumption so far.


However, fertiliser imports plunged to 135,493 tonnes in 2015-16 due to a trade embargo by India. An ensuing shortage and summer and winter droughts led to Nepal’s farm sector seeing a negative growth of 0.19 percent for the first time in the previous fiscal year. In 2016-17, the supply of chemical fertilisers reached a record 330,000 tonnes due to a fall in global prices and stocks that remained unused due to the Tarai agitation and subsequent trade embargo in 2015-16.


Nepal’s annual imports of chemical fertilisers are worth around Rs16 billion. According to the Agriculture Ministry, the annual demand for chemical fertilisers currently stands at 723,000 tonnes. Subsidised fertilisers cover only one-fourth of the country’s total requirement, and the rest is met by informal imports, or shipments smuggled through the porous border with India.


A study conducted by the Finance Ministry in 2006 has put the share of informal fertiliser imports at 71.6 percent of total supplies. Private companies in Nepal are reluctant to trade fertilisers due to their high costs and that risks involved, and all imports and distribution are done by state-owned AIC and National Trading Corporation.

Prices are controlled by the government.



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