Farmers might face a loss of PkR 150 bn loss during Kharif & Rabi season

Karachi: With current gas curtailment, the fertilizer units in the country have lacked production up to their complete capacity which has caused acute shortage of urea in major parts of the country and have compelled retailers to black market the product, as a result of which the farmers could suffer an accumulative loss of over PkR 150 bn.

According to Alfalah Securities Limited, the urea shortage in the country is also a major concern for us as it may affect the food security in the country and wheat production in particular.

The consumption of urea in the Rabi season is estimated to be 3.25 mn tons of urea out of which the government would require an import of 1 mn tons, owing to further gas curtailment due to high consumption in the winter season. The fertilizer manufacturers of the country have a total capacity of 6.9 mn tons including Enven1.3 whereas, the domestic demand stands at 6.3-6.4 mn tons, thus making us self sufficient along with a surplus amount to export, possible only if adequate gas supply is ensured to them.

The farmers are facing severe issues due to urea shortage and are compelled to pay additional PkR 300-400 per 50-kg bag as urea is also being black marketed at a price of PkR 1,800 per 50-kg bag. Hence, the government is required to take steps immediately to overcome this issue and start importing urea before the Rabi season. The imported urea costs around PkR 2,900 per 50-kg bag whereas the domestic prices of the product stands at PkR 1,378 per bag thus, making the government to give huge subsidies to put together the product with the purchasing power of the farmers.