The Rabi season in Pakistan saw inflated prices of nitrogen and phosphate fertilisers due to a reported interruption in the supply chain and a delay in awarding a contract to import urea on the government-to-government deal. In addition, it was reported that fertiliser dealers took advantage of the situation, minting extra money. This translated into farmers’ protests, asking for strong administrative action and price maintenance nationwide.
The farmers pointed out that during the wheat sowing season of Rabi, they registered a spring in urea and phosphate fertiliser prices due to reportedly shortage, hoarding, and black marketing. The farmers complained that urea beg is hardly available for 5000 Pakistani rupees instead of the manufacturing price of 3400 rupees per beg, DAP at 15,000 rupees instead of 10,000 rupees and NP at 8500 rupees against 4500 rupees.
Farmers urged the government to launch a crackdown against dealers, ensure affordable fertiliser availability, and curb the alleged smuggling to Afghanistan.
According to experts, the crisis will soon be over with the arrival of imported urea (first shipment in late December) and DAP fertiliser by the government and private sector. Understand from AKD Research that there is no apparent government control mechanism on price as the government provides sufficient subsidies on gas to fertiliser manufacturers and expects soft prices of fertiliser in the county in return.
The Fertilizer Manufacturers of Pakistan Advisory Council (FMPAC), which is a collaborative forum representing all fertiliser manufacturers in Pakistan, has stated that the industry has produced 5.874 million tons of urea up to 30 Nov and supplied 6.014 million tons in the market. The shortage is experienced due to the closure of SNGPL-based plants during the first quarter due to the non-availability of gas and intermittent closing of urea production by FFBL due to inadequate volume and pressure of gas supplied by SSG. Moreover, delayed import has also caused panic in the market. The industry has been fully cooperative in compliance with various production and supply monitoring demands. Transport issues regarding the impact of the Axle Load Regime are one of the time’s challenges.
Meanwhile, the caretaker government announced that all plants would be running at full capacity throughout the current winter season… to ensure a consistent and sufficient local supply of fertiliser to farmers,` Caretaker Minister for Petroleum Muhammad Ali said at a press conference along with information Minister Murtaza Solangi, Interior Minister Sarfaraz Bugti and Secretary Ministry of Industries and Production Asad Rehman Gilani.
Mr Bugti gave hoarders a 24-hour deadline to end an `artificial shortage` of fertilisers or be ready to face the consequences. Mr Ali specifically emphasised that Fatima Fertiliser and Agritech, which remain closed for three months during winter, would continue to operate at full capacity this year.