The meeting of the Fertilizer Supply and Distribution Management Committee on March 13 increased the sales price of Urea at the import point to Rs 25 per kg from earlier Rs 14 per kg.
Similarly, the price of DAP has been increased to Rs 50 per kg from earlier Rs 43. The price of Potash has been increased to Rs 40 per kg from Rs 31. Among the chemical fertilizers imported into Nepal, the share of Urea is 56 percent while that of DAP and Potash is 42 percent and 2 percent, respectively. Earlier, the government used to provide an 80 percent subsidy on Urea fertilizer which has now been reduced to 64.5 percent. Similarly, the subsidy on DAP has been reduced to 52.4 percent from 59 percent earlier. And, subsidy on Potash has been reduced to 46 percent from 58 percent. Earlier, the government was subsidizing 70.82 percent on the import of chemical fertilizers earlier, which has now been reduced to 59.04 percent. MoALD has said that fertilizer subsidies will also be reduced further gradually. As the ministry plans to limit the subsidies to 50 percent, the price of fertilizers will further increase in the future. According to the ministry, the fertilizer price has been adjusted due to the rising price of chemical fertilizers in the international market and the decline in the exchange rate of Nepali currency with the US Dollar. "Nepal has to spend a lot of budget on subsidy amounts due to ever-increasing purchasing costs and low sales prices," said the ministry in a press statement. The government had allocated Rs 15bn for the import of chemical fertilizers in the current fiscal federal budget. Since the amount was insufficient, the MoALD said that an additional Rs 23.5bn has been managed to ensure the fertilizer imports. According to the ministry, the annual demand for chemical fertilizer in the country is 520,000 tons. However, the government has been failing to supply fertilizers as per the demand. According to the ministry, there is an agreement to import 333,500 tons of chemical fertilizers for the current financial year. So far 237,500 tons have been imported and the remaining 94,000 tons are under process. Despite this, there will be a shortage of 90,000 tons for the paddy plantation season.
