A confident India defies low cost Chinese Phosphorous imports
January 31, 2011

Threatened by low cost phosphoric acid imports from China that rendered the Indian fertilizer market dependent on Chinese imports, Indian companies have decided to fight back. Both, United Phosphorous Ltd, the country’s largest pesticide maker and Tata Chemicals, the country’s largest private sector fertiliser manufacturer are both planning on re-starting factories that were defunked by cheaper Chinese imports. While United Phosphorus will reopen its Ankleshwar facility in Gujarat, which was closed down in 2008, Tata Chemicals is awaiting board approval for a 1 million tonne per annum (tpa) diammonium phosphate facility in Morocco.

The move to fight back lost ground by Indian companies is a new strategy seen in a more confident India. Last year, makers of specialty flat panel screens fought off China’s domination of rare earths by sourcing domestically and aligning with Japan the world’s second largest supplier of rare earths after China curbed supplies and demanded higher rates. The problem is being repeated in the case of Phosphorous a mineral found naturally as rock phosphate and used primarily as a raw material in fertilizers and explosives. With prices of the chemical rising from US$610 a tonne in January 2010 to US$780 a tonne in January this year, China has cut its cheap exports to India.

India is one of the largest consumers of fertilizers, while China is one of the largest suppliers. Unable to cope with domestic demand, India meets a large part of its requirement of phosphate-based fertilisers by importing raw materials including rock phosphate and phosphoric acid. India’s indigenous production of phosphoric acid corresponds to 4.1 percent of global production and it imports a significant 54.4 percent of phosphoric acid of global trade. India’s consumption of phosphoric acid constitutes 11.7 percent of global consumption. Last year, India imported 2.5 million tonnes of phosphoric acid, accounting for half of global trade with nearly 500,000 tonne coming from China alone. It also imports 5 million tonne of rock phosphate, according to the Ministry of Chemicals and Fertilisers.

In 2010, China became the largest producer of rock phosphate, mining 55 million tonnes out of 161 million tonnes of global production, an increase of 8.5 percent from 2008. The country also has the second-largest reserves at 3,700 million tonne, behind Morocco and Western Sahara, which has reserves totalling 5,700 million tonne.


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