Urea shortage

Published December 10, 2023

IT is the time of the year when urea fertiliser vanishes from the market, and wheat growers are forced to pay a significantly high premium on top of its notified price to procure the chemical. No wonder farmers from every corner of the country are complaining about the increasing shortage of urea and its inflated price, amid reports of hoarding by distributors and dealers. That urea retailers are demanding at least Rs1,000 per 50kg above the notified retail price is not surprising, because no wheat farmer can afford to have a shrivelled output just because he did not use the fertiliser. It is well-known that the inadequate application of urea can threaten the already fragile food security. Some media reports suggest that growers from parts of the country have to use political connections to purchase a few bags of urea even from the black market.

A report in this newspaper has quoted a farmer as saying that the country is facing a supply deficit of around 0.5m tonne for the entire calendar year of 2023 due to a shortfall of nearly 0.3m tonne in local production and the government’s failure to import 0.2m tonne of the commodity to stabilise domestic prices, contrary to a decision by the ECC in summer. The gap in supply has given black marketers an excellent opportunity to fleece farmers, especially smallholders who require just a few bags, at a time when they need it very badly. The black market of fertilisers in Pakistan, as well as arbitrary pricing, is indeed a function of mismatch between demand and supply. However, poor market governance also encourages unscrupulous elements to create artificial shortages so that they can make quick bucks during the winter crop cycle when urea demand peaks. The recurrence of the crisis year after year shows that our policymakers are not ready to learn anything from the past to correct the future course.

Published in Dawn, December 10th, 2023

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