Urea sales jump as industry boosts supply

Official says industry providing urea at 83% lower price compared to global market

LAHORE:

Sales of the fertiliser industry jumped 0.5 million tons in the first 10 months (January-October) of 2021 to 5.1 million tons as the industry supplied 10% additional urea to the market this year compared to the previous year.

According to a statement released by the Fertiliser Manufacturers of Pakistan Advisory Council (FMPAC) on Tuesday, fertiliser offtake had stood at 4.6 million tons in the corresponding period of 2020.

Under the Fertiliser Policy 2001, the industry was providing urea at a price which was 83%, or Rs8,500, lower than the international rates, it said.

FMPAC Executive Director Sher Shah Malik cherished that the fertiliser industry managed to ensure adequate and affordable supply of urea.

However, an unprecedented discount compared to the international prices sparked market manipulation and significant black marketing by dealers and middlemen.

“The urea industry’s current retail price stands at Rs1,768 per bag but still the commodity is sold to farmers at over Rs2,000 per bag in various parts of the country,” he said while expressing concern. “This is being witnessed as a result of irregular gains being pocketed by the dealers.”

The perception of urea shortage in the market was deceitful as the fertiliser industry had already sold the highest quantity in the last 10 years in the first 10 months of 2021, the official said.

Furthermore, continuous operation of re-gasified liquefied natural gas (RLNG) plants and adequate inventory levels will enable the industry to meet full-year urea demand of 6.3 million tons. “This will be a record high in a decade and it will be achieved on the back of improved farm economics,” he said.

The government has recently issued a tender for import of 100,000 tons of urea while the cost and freight prices range from $900-1,000 per ton.

“Had the local industry not played its role in ensuring adequate and affordable supply of urea, import of the commodity would have led to a significant depletion of foreign exchange reserves and a sharp rise in the current account deficit,” he said.

Published in The Express Tribune, November 10^th, 2021.

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