Delayed Paddy Transplantation Hits Urea Demand in Telangana
Urea demand has dropped sharply in Telangana as delayed paddy transplantation caused by deficient rainfall has reduced fertiliser consumption, leaving nearly 2.5 lakh tonnes of stock unsold.
The demand for urea has declined sharply in Telangana as delayed paddy transplantation due to deficient rainfall has reduced fertiliser consumption during the Kharif season.
Farmers, who usually compete to purchase urea during the planting season, are staying away this year as transplantation has been delayed in the wake of the El Nino-induced rainfall deficit.
Urea is widely used at different stages of paddy cultivation to promote vegetative growth. However, although paddy seedlings have reached the transplanting stage, many farmers are yet to begin planting because of inadequate water availability.
Farmers who had purchased fertiliser at the beginning of the season are also using less urea as cultivation has been taken up over a smaller area.
The reduced demand has resulted in large stocks of urea remaining unsold. Around 2.5 lakh tonnes of urea produced by Ramagundam Fertilisers and Chemicals Limited (RFCL) is lying in government godowns and dealer outlets, according to factory sources.
RFCL, which produces about 3,850 tonnes of urea a day, supplies fertiliser to Telangana, Andhra Pradesh, Tamil Nadu, Karnataka and Maharashtra, with Telangana accounting for nearly 60 to 65 per cent of its sales.
Anticipating higher demand during the Kharif season, around 65,000 tonnes of urea was supplied to Telangana during April and May, followed by 55,000 tonnes in June. The target for July was fixed at 45,000 tonnes. However, much of the stock remains unsold.
Under the Point of Sale (PoS) system, subsidy is released to RFCL only after farmers purchase the fertiliser. Factory sources said sales have fallen drastically from about 4,000-4,500 tonnes a day during the corresponding period last year to barely 100 tonnes a day now.
With lower PoS transactions delaying subsidy payments, the company is facing financial pressure, as it requires about `400 crore to `450 crore every month towards maintenance and operational expenses.
