Concerned over the sharp rise in prices of phosphatic and potassic (P&K) fertilisers, a Committee of Secretaries is examining the effectiveness of the present NBS policy, which allowed fertiliser companies to fix the prices of these crop nutrients on their own.
P&K fertilisers have been brought under the Nutrient Based Subsidy (NBS) policy as of April 1, 2010.
"The CoS had met on August 16 to review the prevailing rates of P&K fertilisers and to review the price fixation mechanism under Nutrient Based Subsidy (NBS) policy," a Fertiliser Ministry official said.
The CoS, which is headed by the Cabinet Secretary, also examined whether the current system is capable of checking the high prices of these soil nutrients, the official added.
The official said that the CoS had also looked into the issue of farmers opting for urea due to high prices of DAP and MoP.
After the decontrol of non-urea fertilisers like DAP and MoP, the prices of DAP have risen to Rs 25,440 per tonne at present from Rs 18,200 per tonne before April this year.
DAP prices in the second half of 2011 were ruling at Rs 17,200 per tonne as compared to Rs 9,920 per tonne in the year-ago period.
Similarly, the prices of muriate of potash (MoP), which in 2010 were at Rs 4,440 per tonne rose to Rs 11,300 per tonne in 2011 and are currently ruling at Rs 12,200 a tonne.
According to the data presented in the Lok Sabha by Minister of State for Fertiliser Srikant Jena last week, the prevailing maximum retail price (MRP) of DAP is in the range of Rs 23,729-25,316 per tonne, while that of MoP are ruling in the range of Rs 11,000-23,100 per tonne.
"It is seen that there has been lesser sales of P&K fertilisers during April-July 2012 as compared to same period in the last two years. Reduced sales of P&K fertilisers may be due to various factors including deficient monsoon and prevailing prices of fertilisers," the minister said.
However, urea sales have remained more or less the same during this period, he added.
"It is seen that the prices of P&K fertilisers have increased mainly due to increase in international prices of P&K fertilisers on which the government has no control and also the depreciation of Indian Rupee," Jena said.
The global prices of DAP were ruling at USD 677 per tonne in the last fiscal, while that of MoP were at USD 470 a tonne in the same period.
India imports 90 per cent of DAP and 100 per cent of MoP to meet its domestic demand.