INTERVIEW - IFFCO sees India's fertilizer demands increasing

TORONTO (Reuters) - Demand for fertilizer in India is poised to accelerate and there is bound to be an increased focus on balanced fertilizer application, said the head of IFFCO on Monday.

"It is our firm belief that India's soil needs rejuvenation, along with soil management to cater to its micro nutrient and macro nutrient needs," U.S. Awasthi, managing director of the Indian Farmers Fertiliser Co-operative Limited (IFFCO), told Reuters in an interview.

IFFCO was formed in 1967 to produce fertilizer for the cooperative sector in India. Cooperatives were responsible for most of the fertilizer distribution in India at the time, but they owned no manufacturing facilities.

IFFCO today produces more than 7 million tonnes of fertilizer annually and has ties to 40,000 co-operative societies all across India. Its assets are worth more than $10 billion, with manufacturing facilities spread across the country, along with a series of joint ventures and investments overseas.

The Indian government is currently rethinking its fertilizer subsidy regime and this will lead to increased application of phosphate and potash-based fertilizers, which in turn will help boost productivity, said Awasthi.

"Farmers will start looking at their return on fertilizer application more closely and this will result in balanced fertilization," said Awasthi, who has previously served as president of the International Fertiliser Industry Association.

FERTILIZER SUBSIDY

Indian producers are weighed by government policy requiring them to sell below market prices, but they are compensated for the deficit through cash subsidy and bonds. The pricing policy and lack of returns have deterred fresh investments in the sector.