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CareEdge Research Report
In this report, we has analysed the impact of elevated raw material and gas prices along-with rupee's depreciation on the subsidy budget for the fertilizer sector.
We believe the already enhanced fertiliser subsidy budget of ~Rs 2,15,000 crore for FY23 is likely to fall short by around Rs 35,000 crore.
Prices of a majority of the key raw materials for the production of fertilisers remain elevated in H1 FY23 on the back of the Russia-Ukraine war.
Prices of domestic natural gas allocated to the fertiliser sector remained high in H1 FY23 and the same further increased by nearly 40% with-effect-from October 01, 2022, for H2 FY23.
There has nearly been a 7% depreciation of the Indian rupee vis-a-vis the U.S. dollar in H1 FY23, which increases the subsidy requirement since a majority of key raw materials for fertilisers are imported.
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