KARACHI: Urea sales in January are expected to be 617,000 tonnes, down 26 per cent from the preceding month.

Citing provisional data from the National Fertiliser Development Centre, JS Global reported on Friday the offtake increased 3pc on a year-on-year basis last month.

While major local players faced lower or negative growth, government-imported urea sales are expected to have helped meet demand during January, thanks to the end-of-December inventory, it said.

Analysts expect a further drop in the urea offtake going forward as farmers are cash-strapped following the nationwide floods.

The sowing of crops involves heavy expenditure for procuring inputs like fertiliser. Kharif crops like rice, sugarcane, cotton and maize are harvested in October-December. The second sowing season, known as Rabi, starts in October-December. Its crops like wheat and barley are harvested in April-May. In view of the liquidity shortages faced by the agriculture sector, the government recently announced a scheme of subsidised loans for small and medium-sized farmers.

Fertiliser companies expect moderate demand going forward as long as the government doesn’t increase the support price on wheat. Other contributing factors include the expectation of high inflation in coming months as well as the rationalisation in gas prices amid declining national gas reserves.

Published in Dawn, February 4th, 2023