Indian fertilizer producer IFFCO looks for revised subsidies
By Rod Nickel
NEW YORK, May 22 - India's largest fertilizer producer, Indian Farmers Fertiliser Cooperative (IFFCO), expects the country's new government to shake up its fertilizer subsidy program, possibly spurring greater phosphate and potash use to boost crop production.
Two major fertilizer suppliers to the world's second-biggest wheat producer, Potash Corp of Saskatchewan and Mosaic Co, also said on Thursday they expected changes by the Narendra Modi government to the subsidy program, which is a big factor in how much fertilizer Indian farmers buy.
"I think we'll see a shift in government to more balanced application," said Manish Gupta, IFFCO's director of strategy and joint ventures, at BMO's Farm to Market conference in New York.
"Something will surely happen on this."
Modi thundered to electoral victory on Friday in a seismic political shift that gives his party a mandate for sweeping economic reform.
Changing the subsidy program is critical if India is to maximize crop production, Gupta said. Indian fertilizer companies rely entirely on imported potash and heavily on phosphate produced elsewhere.
Since 2010, India has reduced its subsidies for potash and phosphate. That has resulted in urea becoming a more attractive option for farmers relative to the two other fertilizers, leading to an imbalance of nutrients in the soil.
The subsidy program "probably can't get any worse," said Potash Corp Chief Financial Officer Wayne Brownlee, speaking at the BMO conference. "When you have the first majority government in 30 years there is an opportunity for sound policies to prevail over impulse politics." Continued...