This is a direct consequence of the state government's decision of not acceding to the industry's demand for a hike in the price of SSP. The lower- than-reasonable price of SSP in Maharashtra seems to have forced manufacturers to divert their stocks to other states, where it commands a higher price, according to sources.

The price prevailing in Maharashtra is lower by about Rs 150 per tonne than that in other neighbouring states like Gujarat and Madhya Pradesh. Manufacturers are believed to have started diverting stocks last week, they said.

Sources said that a note by the state agriculture ministry expressed the plight of the fertiliser-supply situation in the state. The note states that a shortage to the tune of one lakh tonnes of SSP has been noticed at a time when the kharif season is in full swing. It hasrequested manufacturers to optimise their supplies.

Sources said that the SSP short-supply situation could become grave if the trend continues. The state consumes almost two lakh tonnes of SSP in a season. The SSP supply situation indicates that a stock amounting to only one lakh tonnes of the fertiliser is available in the state.

This is despite the fact that the total manufacturing capacity of SSP in the state is a comfortable 2.5 lakh tonnes during a season. The industry had demanded a hike in price of SSP in the range of Rs 150-180 per tonne for the ongoing kharif season. The price increase was asked for, as raw material prices had risen considerably. The current price of powdered SSP is Rs 3,265 per tonne, while that of granulated SSP is Rs 3,505 per tonne.

The centre provides an ad-hoc subsidy of Rs 600 per tonne on SSP, which is a decontrolled fertiliser. The farmer's price for SSP is Rs 2,665 for powdered SSP and Rs 2,905 per tonne for the granulated one.

Sources said that the situation can beprevented from being aggravated if prices are revised upwards to a reasonable level. However, it is unclear whether the state government will reconsider this demand.