LAHORE: Pakistan Kissan Ittehad (PKI) president, Khalid Mahmood Khokhar said that the urea shortage being faced by the farmers stated that current consumption estimates of Urea is 6,700,000 MT per annum due to an increase in the area and usage in cereals and cotton crops.
Talking with journalists on Friday, Khokhar mentioned that Pakistan requires an additional 200,000 MT urea as a buffer stock to keep prices stable. “Unfortunately, during 2023, production estimate of domestic urea may hardly touch 6,400,000 MT versus a demand of 6,700,000 MT per annum, thus the farming community is experiencing a shortfall of around 500,000 MT (consumption deficit 300,000 MT + buffer stock 200,000 MT)”, he said.
While sensitizing the concerned authorities, he highlighted the fact that the full production capacity of the industry is not being utilized at its optimum level, thus contributing to the shortfall in urea availability.
He also suggested workable solution to avoid recurrence of urea shortage in future to safeguard the farming community from middlemen exploitation. “Presently industry is selling urea at different Market Retail Prices (MRPs ranging from Rs3,410 to Rs3,795 per bag) due to variable gas charges imposed on different urea manufacturing plants by the government”, he said adding “collectively, this situation encourages and provides opportunity to the middleman to exploit farmers by charging around Rs1,000/bag over and above to the prescribed maximum retail prices (MRPs) by the manufacturers”. On annual basis, middlemen have grabbed more than Rs100 billion as black money from the farmers’ pocket, Khokhar added.
Talking about the current situation, he added that historically urea consumption during December oscillates between 850,000 to 900,000 MT, whereas total availability during this month will not be more than 650,000 MT. “The demand supply situation clearly indicates that there is vivid shortfall of 250,000 MT which provides the opportunity for black-marketing and exploitation of farmers by the middlemen”.
If we look at the imbalanced demand/supply situation, the non-availability/low pressure of gas for urea manufacturing plants resulted in urea production loss of around 300,000 MT, is one of the prime reasons.
“The other reason is that despite the Economic Coordination Committee’s approval to import 200,00 MT urea, nothing has been materialized till date, resulting in a further chaos in urea markets.
following two prime reasons underpinning the gravity of situation”, Khokhar added.
Talking about the economically viable solutions, he said that the gravity of the situation could have been managed if required gas was provided to the urea manufacturing plants round the year. Secondly, timely execution of import decision would further have minimized the gravity of issue. He reminded that country witnessed the same shortage scenario last year, due to intermittent gas supply to urea plants and the deficit was bridged through expensive import of 500,000 MT at a cost of precious forex.
The situation urgently wants governments intervention to control the situation now and avoid such happening during 2024 and ensure uninterrupted supply of gas to the fertilizer industry and safeguard urea availability at one price across the country to avoid middlemen exploitation to the farmers, the president PKI added.