To meet the demand of fertiliser in the ongoing kharif season, the government has contracted 2 million tonnes of urea import for delivery by the end of this month.
India is dependent on urea imports as domestic output is lower than the demand. Overseas purchase is being done via three state trading enterprises - STC, MMTC and IPL.
"Our urea requirement is 2.5 million tonnes for this kharif season. We have finalised imports for 2 million tonnes of urea which will reach Indian ports by the end of this month," a senior Fertiliser Ministry official told PTI.
The third import tender has been floated to procure the balance 5,00,000 tonnes of urea, the official said.
Till last week, farmers had sown kharif crops like paddy and pulses in 40.6 million hectare. Though the acreage was down compared to the year-ago period, good rains in most parts have boosted planting operations.
Once the kharif season is over, the government will assess the urea requirement for the rabi (winter) season after discussing with the states and then place tenders for imports.
Normally, urea requirement is around 3.5 million tonnes for the rabi season beginning October.
Stating that country's total urea imports could come down this year, the official said, "overall, urea import is estimated to be around 7 million tonnes in the 2016-17 fiscal, much lower than 8.5 million tonnes in the last year."
The imports are expected to be lower on likely increase in the domestic output of the fertiliser this year and if the demand remains at last year's level of 31 million tonnes, the official added.
Much of the urea imports is procured from open market, India also has an offtake agreement with Oman-based fertiliser firm OMIFCO, which is a joint venture between domestic cooperatives IFFCO, Kribhco and Oman Oil company SAOC.
Last month, Fertiliser Minister Ananth Kumar had said the domestic urea output could touch a new record at 25.5 million tonnes in 2016-17 fiscal, up by 1 million tonnes from the last year.
Urea is a controlled fertiliser and sold at a fixed selling price of Rs 5,360 per tonne. The difference between cost of production and selling price is paid as subsidy to manufacturers.
