Govt assigns top priority to urea plants

LAHORE: The federal government has geared up for ample urea availability for cultivation of upcoming strategic wheat crop by attaching top priority to manufacturers with regard to gas supply.

This was decided in an important meeting held on Saturday under Deputy Prime Minister Ishaq Dar. The participants agreed that the Petroleum Division would guarantee continuous gas supply to all fertilizer plants throughout the Rabi season. This decision has been aimed to avoid imports and prevent foreign exchange losses, allowing fertilizer plants to operate at full capacity.

With adequate production and a buffer stock in place, the price of urea bags is expected to remain stable. Stable pricing is beneficial for farmers and supports the rural economy, participants of the meeting observed.

The participants explored several strategies to ensure an adequate supply of fertilizer at reasonable prices for wheat sowing in the upcoming Rabi season. During the meeting, participants expressed satisfaction on the current availability and pricing of urea for the ongoing Kharif season. Ishaq Dar also called on provincial governments to enhance market monitoring to maintain price stability and prevent profiteering.

In mid-season review for ongoing Kharif 2024, National Fertilizer Development Center (NFDC), a government body to oversee compost demand and supply, assessed offtake of urea and DAP at 483 and 123 thousand tonnes, respectively in June 2024, reflecting a decline of 20.9 and 22.2 percent compared to June 2023. The overall nutrient offtake for June 2024 totaled 367 thousand tonnes, marking a decrease of 20.2 percent from the previous year. Specifically, nitrogen and phosphate offtake saw reductions of 19.6 and 23 percent, respectively, while potash offtake experienced a significant increase of 92.5 percent.

Regarding local production and imports, in June 2024, domestic fertilizer production amounted to 717 thousand tonnes, with urea and DAP production at 497 and 70 thousand tonnes, respectively. As far as fertilizer prices are concerned, various variants of urea saw mild volatility in prices, ranging between 2.0 and 1.5 percent compared to May 2024. The average prices for urea were Rs4,744 and Rs4,630 per 50 kg bag.

In the international market, urea prices remained relatively stable in the Chinese market, while prices in the Arabian Gulf increased by $55-60 per tonne in June 2024 compared to the previous month. Urea prices were reported at $317-338 and $320-355 per tonne FOB bulk for China and the Arabian Gulf, respectively. The ex-Karachi price for imported urea fluctuated between Rs5,946 and Rs6,542 per 50 kg bag.