Govt to Import 200,000 Tons of Urea to Fulfil Demand Gap During Kharif Season

Federal Minister for Industries and Production Makhdoom Syed Murtaza Mahmud chaired the meeting of the fertilizer review committee on Monday. 

The meeting discussed the domestic production and demand for fertilizers during the Kharif season.

The Chair was briefed that projected domestic production of urea would be 3.2 MMT from April-September 2022 whereas the probability of urea off-take would remain at 3.4 MMT in the same period. The forum was also told that there would be a 2 percent increase in agronomic demand for fertilizers this year. It was noted that urea sales went up by 17 percent last year.

The forum noted that a significant part of urea’s demand would be met domestically, however, a summary for urea import of 200,000 tons would be placed to fill the gap before demand peaks in June during the Kharif sowing season. In order to curb the hoarding and profiteering,  leading to the smuggling of urea across the border due to high price differential, the body decided to take up strict measures in cooperation with the law enforcement agencies, FBR, and Ministry of Interior to thwart cross-border trafficking of urea.

Speaking to the meeting, the Minister said that the government had geared up to ensure a smooth, adequate, and timely supply of key soil nutrients to farmers during the Kharif season and the decisions would be taken accordingly. He said that government would make all-out efforts to provide urea to farmers at affordable prices timely.

The forum also discussed the recent price hike of urea from Rs. 1768/bag to Rs. 1933/bag on average, while Engro had increased the prices up to Rs. 2017/bag of urea despite the government supplying gas (approximately 80 percent constituent of urea price) at subsidized rates. The industry responded that prices were increased due to the financial cost of holding inventory and pending payment of subsidies and refunds from the government exchequer. The Ministry noted that the government had the option of conducting a forensic audit which may be exercised if urea prices continue to increase during Kharif season.

The Minister assured that government would address issues pertaining to payments and urged the industry to rationalize the prices immediately to support the farmers’ agriculture productivity in the country.

The participants of the meeting included representatives of the fertilizer-manufacturing industry and officials from the Finance Division, Petroleum Division, Ministry of Food Security and Research as well as officials of Provincial agriculture departments