PM orders crackdown against fertiliser hoarders

Analyst says there is ample supply, artificial shortages being created to raise prices

KARACHI:

Caretaker Prime Minister Anwaarul Haq Kakar has directed authorities concerned to launch a crackdown against fertiliser hoarders, smugglers, and profiteers, stating that there is enough stock of urea available for the current wheat season in the country.

In a statement from the PM Office Media Wing by APP, the Press Information Department (PID), Karachi, reported, “Caretaker Prime Minister Anwaarul Haq Kakar on Monday said that enough urea fertiliser was available in the country to meet requirements and directed the initiation of legal proceedings against those involved in its hoarding and illegal profiteering. Those exploiting farmers by urea fertiliser hoarding would not be spared.”

“The meeting was apprised that for the buffer stock, a total of 2 million metric tonnes of urea would be imported,” according to the statement.

Addressing the participants, the caretaker prime minister directed for easier and trouble-free supply of fertiliser to farmers and asked for strict supervision over its demand and supply. He also directed the relevant federal ministries to ensure their assistance to the provincial governments in the action taken at controlling the issue of hoarding by providing details about demand and supply of fertiliser. In late November 2023, the Economic Coordination Committee approved the import of 220,000 tonnes of urea from Azerbaijan, it was learnt.

While talking to The Express Tribune, Optimus Capital Management’s Research Analyst, Areeba Nasir said Pakistan supplies urea fertiliser at a significant discounted price to its farmers compared to its price in international markets. This sometimes activates smugglers to sell the commodity to expensive markets beyond the borders.

Read Fertiliser shortage grips Sindh during sowing season

“Urea was available at a discount of 31% in Pakistan in November compared to the global markets,” she estimated.

Sharing the latest sales and inventory numbers for the wheat sowing season (Oct-Dec 2023) in Pakistan, the analyst said there was enough stock of urea fertiliser in Pakistan despite its stockpiling being noted in the country. “There is no shortage of urea fertiliser in actual; the crisis is an artificial one.”

“The planned import of 220,000 tonnes, which was to arrive in Pakistan from December 20, 2023, may help normalise the price,” she said. She said the domestic urea manufacturers are selling the fertiliser to dealers at Rs3,400/50kg bag. This should be available to farmers at Rs3,500-3,600/bag. The fertiliser, however, is being sold at up to Rs5,000/bag in some parts of the country due to stockpiling and likely smuggling these days.

She said the urea price has increased by around Rs1,000/bag in the past one year. It was being sold on average at Rs2,471/bag in retail this time last year. “The increase in gas prices during the year caused surging fertiliser prices in the country (as gas remains a raw material in fertiliser making).”

She said the DAP fertiliser is available at Rs13,000/bag in retail these days. Its price remains close to the one in international markets, as the country mostly meets its requirement through imports. She said companies sold 1.8 million tonnes urea during the three-month wheat sowing season last year. This year, they have so far sold 1.069 million tonnes in the first two months (Oct-Nov). The data for December 2023 is yet to be made available.

Published in The Express Tribune, January 2^nd, 2024.

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