Urea shortage hits farmers hard

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LAHORE:

Pakistan Kissan Ittehad (PKI) President Khalid Mahmood Khokhar has said that urea shortage is being faced by farmers as its consumption is estimated at 6.7 million tons per annum following an increase in plantation area and growing use of the commodity in cereal and cotton crops.

Talking to media on Friday, Khokhar mentioned that Pakistan required an additional 200,000 tons of urea as a buffer stock to keep prices stable.

“Unfortunately, during 2023, the domestic production estimate might hardly touch 6.4 million tons versus demand for 6.7 million tons, thus, the farming community is experiencing a shortfall of around 500,000 tons (consumption deficit of 300,000 tons and buffer stock of 200,000 tons),” he said.

Drawing the attention of authorities, Khokhar claimed that full production capacity of the fertiliser industry was not being utilised, resulting in urea shortfall.

He called for finding a workable solution to avoid the recurrence of urea shortage in future to safeguard the farming community from middlemen’s exploitation.

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“At present, the industry is selling urea at different retail prices, ranging from Rs3,410 to Rs3,795 per bag, due to variable gas charges imposed on different urea manufacturers by the government,” he revealed, adding that the situation encouraged and provided an opportunity to middlemen to exploit farmers by charging around Rs1,000 per bag over and above the prescribed maximum retail prices of the manufacturers.

“In a year, middlemen have pocketed more than Rs100 billion as ‘black money’ from farmers,” he claimed.

Talking about the current situation, the PKI president added that historically urea consumption during December had oscillated between 850,000 and 900,000 tons whereas total availability during the month would not be more than 650,000 tons. This clearly indicates a shortfall of 250,000 tons, which provides an opportunity for black marketing and exploitation of farmers.

“If we look at the demand-supply imbalance, the unavailability/ low pressure of gas for urea manufacturing plants has resulted in production loss of around 300,000 tons, which is one of the prime reasons for the shortfall,” he said.

Also, despite the ECC’s approval for import of 200,000 tons of urea, nothing has transpired yet.

The PKI president said that the situation could have been managed, had required gas been provided to urea plants round the year. Secondly, timely execution of import decisions would have further minimised the challenges.

Published in The Express Tribune, December 9th, 2023.

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