Pakistan’s agriculture sector may face crisis

Pakistan’s agriculture sector may face a crisis as the country struggles to meet the demand for urea fertiliser, a key input for crop production, The News International reported, quoting industry officials amid a severe shortage of natural gas.

The News International is an English-language newspaper in Pakistan.

The fertilizer review committee (FRC), a body that monitors the availability and prices of fertilizers, in its recent report warned that the country could face a shortfall of urea in the ongoing Kharif season, as well as the upcoming Rabi season.

The FRC attributed the urea shortage to the low domestic production capacity, which is hampered by the insufficient supply of natural gas to the fertilizer industry. Natural gas accounts for 70 to 80 per cent of the cost of urea production, according to Dawn.

One of the stakeholders who attended the FRC meeting said: “The writing is on the wall and the warning about persistent urea shortage has become more evident from the lingering issue stemming from the paucity of natural gas, which is the main input for the fertilizer industry.”

All provinces at the crucial meeting, officially raised the issue of urea shortage. The price of urea, which was around Rs 2,600 per 50-kilogram bag at the start of the Kharif season, now stands at about Rs 3,000. It is, however, difficult to obtain the farm input at the official price.

Instead, the nutrient is being sold at up to Rs 3,300 per bag in Punjab and Rs 3,700 to Rs 4,000 in Sindh and Balochistan. Farmers in Khyber Pakhtunkhwa have also complained about the urea price hike.

According to estimates, there will be a shortage of 0.2 to 0.6 million tonnes of urea by the end of the Rabi season of 2023-24. Manufacturing plants in Punjab used to face a shortfall of natural gas. Bigger plants in Sindh are now dealing with low pressure and curtailed supplies, severely affecting the output of essential farm nutrients.

Punjab’s projection for the ongoing Kharif season stands at 2.35 million tonnes for urea and 0.8 million tonnes for DAP. Punjab has to bear about 16 per cent low urea availability in June. Overall, farmers in Punjab are getting 13 per cent less urea in the current season.

The mandatory pairing of urea and DAP by dealers has led to low buying by farmers, as many cannot afford to buy costly DAP. This has also resulted in low urea off-take.