LAHORE: The government shut down two urea factories by cutting off gas supplies to both of them on Jan 4 (last Wednesday), further denting the urea fertiliser market.
Fatima Fertilizer Company Limited and Agritech Limited produce around 77,000 tonne urea per month and their closure is bound to create a urea availability crisis to the disadvantage of the farmers as well as the country.
Officials say the step was warranted to maintain gas pressure for domestic consumers during extreme winter. They say costlier imported gas or regassified liquefied natural gas (RLNG) cannot be supplied to the fertiliser industry at highly subsidised rates, hence they have to shut the plants down.
Urea is required in the months of January and February for Rabi crops, particularly wheat. Its shortage means that wheat production will go down drastically, spelling disaster for the already foreign exchange-starved country, which will have to import more grain this year.
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From July 2020 till September 2022, Pakistan had to spend $2bn to import 6 million tonnes of wheat.
Urea is already selling at Rs2,900 per 50kg bag in the open market– Rs460 per bag above the maximum retail price of Rs2,440 per bag–due to existing shortage of the compost in the country.
The farming community paid billions of rupees extra to procure urea in the last one year. With the closure of the two urea manufacturing factories, its prices will now jump to over Rs3,000 per bag as the farmers will suffer at the hands of the black-marketing mafia.
The national food security will be hit because of the phenomenon as Pakistan, despite being an agrarian country, will be dependent on other countries for feeding its people.
Pakistan Kisan Ittehad president Khalid Mahmood Khokhar says urea shortage means shortage of food crops like wheat and export crops like cotton, rice and maize.
Demanding immediate restoration of gas supplies to the urea manufacturing plants, he fears that the urea shortage will also impact Pakistan’s exports due to lack of enough raw material from cotton, rice and maize crops.
“Reopening of the urea plants is in the interest of the country as the move will prevent food shortage and ensure exports of products made of cotton, rice and maize.”
He estimates total urea demand in the country at around 6.8 million tonnes against the installed production capacity of 6.5m tonnes per annum, a gap of 300,000 tonnes between demand and supply, and with the closure of the two factories the situation will worsen.
Mr Khokhar has also written a letter to Prime Minister Shehbaz Sharif urging him to intervene in the matter and save the agriculture sector, the last hope of the country.
He has informed the prime minister that the farming community has not yet recovered from the climate adversity that had hit the country between June and September and the growers have insufficient capital to purchase farm inputs, particularly fertilisers. He claims wheat crop has already been affected because of at least 40pc low application of phosphatic compost this year, as a result plants leaves are paler than being greener, showing poor growth.
If the farmers fail to apply urea too, a drastic shortfall in wheat yield will force the country to import even higher quantities of grain from abroad than last year, he warns.
Meanwhile, Kisan Board Pakistan vice president Amanullah Chattha says flour price in the open market has crossed the mark of Rs5,000 per maund and grain is being imported by spending precious foreign exchange but the government is giving a fig to the new wheat crop by not checking inflation on the rates of farm inputs like fertiliser and pesticides. He cautions that if the Rabi crop fails the country will be facing a severe shortage of wheat leading to further food inflation and thus public unrest.
Published in Dawn, January 9th, 2023
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