According to sources in the ministry, urea will be in short supply this season following suspension of gas supply to fertiliser plants and refusal by Saudi Arabia to export fertiliser on credit, which it had been doing in the past.
In this scenario, the farmers have no choice but to buy urea from private importers at high prices. Absence of a price control mechanism is the main reason for the rising prices.
The Economic Coordination Committee (ECC) has fixed the price of imported urea at Rs1,785 per bag, but its scarcity has taken the price to Rs2,000 in the market. This increases the cost of production for the farmers.
According to figures compiled by the National Fertiliser Development Centre (NFDC), 183,000 tons of urea was available as opening inventory this season. The government had planned to import 208,000 tons in November, but it did not make any in the month.
The country produced 435,000 tons in October and 430,000 tons in November. It is estimated to produce 425,000 tons in December, 350,000 tons in January, 350,000 tons in February and 405,000 tons in March.
However, sources believe that it will not be possible to meet the domestic output target in the wake of suspension of gas supply to fertiliser manufacturers.
Federal Industries and Production Secretary Raja Hassan Abbas said the ministry was making efforts to ensure adequate urea production to meet the target. An official in the Ministry of National Food Security and Research said four ministries were directly associated with the import of fertiliser including the Ministry of Commerce, Ministry of National Food Security and Research, Ministry of Planning and Development and Ministry of Industries and Production, which was the main reason for the delay in formulating and implementing policies.
Speaking to The Express Tribune, Member National Assembly Raza Hayat Hiraj, who is also a member of the NA standing committee on national food security and research, said farmers were facing an enormous challenge because of urea shortage and the government seemed least interested in addressing the issue.
“In the last one month, around Rs200 and Rs250 has been increased in the price of 50kg urea bag,” said Hiraj.
Owing to the government’s inefficiency, he said, Saudi Arabia had refused to provide urea on deferred payment. “Now the farmers will be at the mercy of private urea importers.”
He also criticised the food ministry for its failure to set a mechanism in this regard.
Published in The Express Tribune, December 3rd, 2014.
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