LAHORE, March 5: Fertiliser manufacturers on Monday announced a Rs7 cut in the price of urea for a 50kg bag from Feb 26, industry officials say. The reduction in prices, they say, has come in response to a recent 10 per cent decrease in feed gas price to fertiliser manufacturers by the government.

The reduction has cut production by Rs138 per ton, which translates into Rs6.90 per 50kg bag. Thus the price of 50kg bag has been reduced to Rs538 from earlier Rs545.

The farmers, however, said the reduction would not benefit them as Rabi season has already matured, and currently no crop needed urea fertiliser.

Even Kharif sowing, which is on hands, needed DAP, which has disappeared from market.

According to industry officials, urea is the most consumed nutrient by farmers as country's soils at all locations are highly deficient in nitrogen, which is supplemented mostly by urea, containing 46 per cent nitrogen.

Other fertilisers containing nitrogen are DAP (18 per cent), MAP (12 per cent) and NP and NPKs (8-23 per cent).

Total fertiliser nutrient off-take during Rabi 2006-07 (October-January) was about 1,748,000 tons which went up by 13.7 per cent compared to the corresponding period last Rabi.

Nitrogen off-take dwindled marginally by 0.4 per cent whereas phosphate was up by 49.6 and potash by 188.8 per cent compared to last season.

In product terms, urea off-take decreased by 8.5pc while DAP increased extraordinarily by 56.2pc.

Total production of all fertiliser products during January 2007 was about 494,000 tons. Out of this, urea was 401,000 tons which is 81.2 per cent of the total production.The other products were DAP 42,000 tons, CAN 18,000 tons, Nitrophos 18,000 tons and SSP 12,000 tons.

Imported supplies from port were 36,000 tons of urea and 19,000 tons of DAP during January 2007.

Urea availability seems comfortable for the remaining period of Rabi 2006-07.

As 2,984,000 tons would be supplied in the market to meet the demand of about 2,808,000 tons. Thus 177,000 tons would be left unused in the season that will augment the next season supplies. This depicts a comfortable supply situation for the country for coming Kharif 2007. Commenting on the situation, Ibrahim Mughal of AgriForum says that no crop now requires urea fertiliser.

There is a urea glut in the market, and its price has dwindled lower than the newly announced price due to over supply and less demand: it is available in the market at a price ranging between Rs530 to 540, depending on the brand.

He termed it a continued rigging of the market by everyone. Currently, farmers need the DAP, which has disappeared from the market. The importers, manufacturers and dealers would now make money on it. By July next, urea prices would be increased when it would be needed for Kharif crops.

He said that 50kg urea bag was available for Rs520 last June when budget was announced. Since then, none of the fertiliser input had registered any increase.

Now, feed gas price has gone down by 10 per cent. By that calculation, the price should have been Rs513 per 50 kg bag. But, this has not been the case. The manufacturers made money on urea when it was required and have reduced price when it was not needed.