India extends special DAP subsidy and keeps MRP steady

Market: Fertilizers
02/01/25

The Indian government yesterday extended the special DAP subsidy of Rs3,500/t into the new year, while local sources say the maximum retail price (MRP) will remain unchanged.

The special subsidy, which was approved in July 2024 and valid from April 2024, was initially set to end on 31 December. It will now remain in place until further notice. This subsidy supplements the existing nutrient based subsidy (NBS) of Rs21,911/t for the 2024-25 rabi season (October-March).

In mid-December local sources reported that the government would allow the MRP to rise by around Rs4,000/t to about Rs31,000/t from 1 January. But sources now state the MRP will remain at Rs27,000/t.

DAP importers buying at $632/t cfr face losses of around $101/t with the current dollar-rupee exchange rate, MRP and NBS including the special subsidy.

The government is set to keep compensating importers for these losses until the end of March.

Provisional data indicates India was on track to end 2024 with 1.2mn t of DAP in stocks because of slowing imports, well below a comfortable 2mn t, as had been maintained in previous years.

By Adrien Seewald

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