Urea shortage threatens agricultural sector’s growth

Fertiliser price in some areas of Punjab rises to Rs2,000 per bag.

MULTAN:

Farmers in Punjab are facing a severe shortage of fertiliser as its production has dwindled mainly due to gas outages, threatening the output and growth of the agricultural sector.

Gas outages have increased and with rising tariffs, problems for the sector, which is directly associated with agriculture, will mount. Besides long hours of gas stoppages, hoarders have also contributed a lot to creating an artificial shortage of urea, which is in high demand these days as farmers are cultivating different types of crops.

Sources told The Express Tribune that black marketers were selling a 50 kilogramme bag of urea for Rs1,600 compared to the normal price of Rs1,300. Agricultural experts said if the urea shortage persisted, cotton production would be adversely affected and the country would eventually miss the production target of 15 million bales. “Cotton crop is in dire need of application of urea,” a farmer said.

Cotton crop needs two to three bags of urea for one acre while Bt cotton, a pest and insect-resistant variety, requires seven to eight bags per acre. If the crop falls short of the target, exports of textile, the largest foreign exchange earner, may come down, with a adverse impact on employment-generation.

With high urea prices adding to their cost, farmers have requested the Punjab chief minister to take notice of the shortage as well as hoarding of fertiliser. Some farmers have accused the agricultural department of working in connivance with fertiliser dealers in black marketing of the commodity.

If hoarding and gas outages continue, there are fears the price of urea will reach Rs2,000 per bag. In some areas of southern Punjab, urea is already being sold for Rs1,800 per bag.

Meanwhile, the government is considering extraordinary increases of 10 to 96 per cent in gas prices for different sectors. The highest increase of 96 per cent was being mulled over for fertiliser manufacturers, who had so far been enjoying a significant subsidy.

However, import of 150,000 tons of urea, which is expected to arrive this month, may provide some relief for farmers.

Pak Arab Fertiliser Marketing Manager Farrukh Nadeem Abid said manufacturing plants were working at 80 per cent of capacity and that too depended on the schedule of gas outages. “The problem with the manufacturing of urea and other fertilisers is that they cannot be manufactured without gas and unscheduled outages will crush the industry,” he said.

Fertiliser dealers association’s former president for south Punjab Abdul Hameed Niazi said the government was not providing gas to local manufacturers, instead it was relying on costly import of urea at Rs2,800 to Rs3,000 per bag.

“Urea manufacturing requires continuous supply of gas and if it is provided, prices will drop below Rs1,000 per bag,” he said.



Published in The Express Tribune, July 10^th, 2011.