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Ammonium Nitrate Dumping

The sharp increase in the import of ammonium nitrate (AN) from Russia has raised alarms among domestic fertilizer companies, which are currently investing over Rs 4,000 crore to ramp up their AN production capacity.

The Issue at Hand

The import of ammonium nitrate surged to 2.39 lakh tonnes in the last fiscal year, up from just 91,236 tonnes in FY22. This significant increase has resulted in a decline in domestic capacity utilization, which fell from 91% to 72%.
A key factor contributing to this issue is the substantial price gap between domestic and imported AN.
Countries that benefit from low-cost, subsidized natural gas, a critical raw material for AN production, are able to sell their products (dump) at much lower prices.
- Dumping is the export of a product at a price that is lower in the foreign market than the price charged in the exporter's domestic market.
Industry stakeholders are calling for urgent measures to curtail imports of ammonium nitrate, aiming to eventually stop them altogether.
Achieving self-reliance in AN production would not only enhance the sustainability of coal production but also contribute to energy security in the country.

India's Capacity for Ammonium Nitrate Production

India currently has an installed ammonium nitrate production capacity of 96 lakh tonnes per annum, with an additional 10.19 lakh tonnes per annum capacity under development by major fertilizer companies, including Rashtriya Chemicals and Fertilizers, Gujarat National Fertilizer, and National Fertilizer.
Earlier this year, Coal India entered into a joint venture with Bharat Heavy Electricals Limited (BHEL) to establish a new AN plant in Odisha, with an investment of Rs 11,782 crore.
- Once operational, the joint venture is expected to produce 2,000 tonnes of ammonium nitrate per day.

Importance of Ammonium Nitrate

Ammonium nitrate is a chemical compound with the formula NH4NO3. It is a white crystalline salt consisting of ions of ammonium and nitrate.
Usage:
Fertiliser: Ammonium nitrate is a widely used fertilizer, primarily due to its nitrogen content. The compound consists of two key components: NH4 (ammonium) and NO3 (nitrate).
Plants can directly absorb nitrogen from the nitrate form, while the ammonium fraction is gradually converted into nitrate by soil microorganisms.
Mining operations: It is used as an explosive for blasting before the extraction of ores such as coal, iron, and limestone.
Other than the above, it is used as an ingredient for manufacture of anaesthetic gases, cold packs, etc.

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GS Analyst: Daily Current Affairs

18th September 2024 (10 Topics)

Copy

Ammonium Nitrate Dumping

The Issue at Hand

India's Capacity for Ammonium Nitrate Production

Still Have Questions?

GS Analyst: Daily Current Affairs

Ammonium Nitrate Dumping

The Issue at Hand

India's Capacity for Ammonium Nitrate Production

Still Have Questions?

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