FICCI seeks rollback in ammonia price

By Our Special Correspondent

NEW DELHI, MAY 13. The Federation of Indian Chambers of Commerce and Industry (FICCI), has urged the Chemicals and Fertilizers Ministry to reconsider the price hike of ammonia as it has adversely affected critical segments in the chemical industry using ammonia as an industrial input.

In a statement issued here today, the FICCI said ammonia prices were recently increased by over 50 per cent - from Rs.9000 to Rs.14,000 per tonne with effect from April 15.

The chemical industry was severely affected because of the shortage of ammonia and the price hike. Some chemical units using ammonia as an input were even facing virtual closure.

With duties on chemicals already reduced from 180 per cent to nearly 25 per cent, any increase in the input ammonia cost would make these units economically unviable, the FICCI maintained.

The FICCI pointed out that the major chemical manufacturers using ammonia were in critical sectors like defence, mining, drugs, dyes, agro chemicals, paints, and pesticides.

In India, infrastructure for import of ammonia was available only with port-based fertilizer manufacturers. So ammonia-consuming industries were concentrated in and around the fertilizer industries.

The chemical was bought and consumed using cylinders and road tankers and storage and handling facilities were developed and controlled by them.

The FICCI had also made a survey to assess the impact of the price hike and inadequete availability on the user industry. Units adversely affected were small consumers of ammonia and producers of intermediates for bulk drugs, defence, and agro- chemicals.

All export commitments given by the ammonia consumers may not be honoured in the changed scenario, it felt. Fresh vegetables, fruits, poultry products and horticulture industries would also suffer for want of cold storage facility due to shortage of ammonia.

The FICCI said the CIF price of ammonia in bulk was around 140 dollars per tonne. The import price of ammonia, therefore, would not be more than Rs.8 per kg.

The domestic price which used to be in the range of Rs.8 to 9 per kg has suddenly been hiked to Rs.14 per kg by the domestic producers.

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Section  : Business
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