Farmers are set to bear the brunt of gas shortages, as continuous curtailment in supply to factories may result in a shortage of fertiliser by August and price escalation that will adversely affect cash crops.
Relevant government departments and representatives of fertiliser companies on Wednesday informed higher authorities about the implications of the ongoing gas outages for the important agricultural input and prices in coming months.
At a meeting to review the latest urea situation, Ministry of Food and Agriculture (Minfa) and Trading Corporation of Pakistan (TCP) officials told the industries minister that there was sufficient stock of urea and di-ammonium phosphate (DAP) fertilisers for the Kharif season. However, if the gas curtailment continues, there might be a shortage by the end of August.
Haphazard policies have brought the county to a point where the government has no option but to resort to gas load management, even in the summer. A likely shortfall in fertiliser production would negatively impact the output of rice and sugarcane – the two important cash crops. The government may, however, consider importing more fertiliser as an alternative to the shortfall in domestic production.
Representatives of fertiliser companies demanded the government to provide a proper gas supply schedule, after which the companies will be in a position to determine the exact increase in fertiliser prices. Indefinite gas shutdown to companies will result in lower production and higher cost of production that would ultimately result in further price increases, they added.
The farming community is complaining about a massive increase in DAP prices. Price of a 50kg bag has soared to Rs4,200 from Rs2,800 a fortnight ago. They are also complaining about substandard fertilisers.
Federal Minister for Industries and Production Mir Hazar Khan Bijarani expressed concern over the rapidly increasing prices of urea and DAP, but could not provide a solution to the problem. He, however, urged the manufacturers to ensure urea supply at reasonable prices.
Fertiliser companies told the meeting that the government’s proposed plan of gas supply to fertiliser units for 15 days a month was not acceptable to them, as it would be unfeasible and would also result in damage to their plants. The industries ministry has decided to take the matter to the Economic Coordination Committee of the cabinet in its next meeting.
The government has already imported 800,000 tons of fertiliser to meet the requirement for Rabi and Kharif seasons. It has also obtained a loan of $200 million from Saudi Arabia for importing urea from the country. Interestingly, the fertiliser imported from Saudi Arabia is much costlier than the one purchased through international tenders.
Published in The Express Tribune, April 21st, 2011.
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