Prime Minister Imran Khan has directed the concerned authorities to take all possible steps for efficient management of urea supply chain for Rabi crops and clarified that those involved in creating artificial shortage will be dealt with iron fists. Meanwhile, the Economic Coordination Committee authorized the import of 50,000 Metric Ton of Urea from China on immediate basis.
The government’s decision should help curb market volatility at a time when wheat farmers are facing shortages and a spike in retail prices despite record urea sales. Producers have sold approximately 6.34m tonnes of fertiliser this year against their three-year average annual sales of around 6m tonnes due to growth in the commodity’s demand.
On the other hand, farmers have claimed that officials of agriculture department are providing urea fertilizer to concerned mafia and due to its shortage their crops are being damaged. On the contrary, Federal Ministers Khusro Bakhtiar and Hammad Azhar said there is no shortage of fertilizer in the country.
The prime minister while chairing a meeting said 25,000 tonnes of urea are produced in Pakistan every day which is enough to meet the needs of the agriculture sector. However, the question remains why are farmers facing shortages and compelled to pay a hefty premium to buy the fertiliser despite its record sales?
The main reason for its unavailability is believed to be the smuggling of urea out of the country owing to the enormous price differential in local and international markets. Agriculture is the backbone of Pakistan’s economy, a large part of Pakistan’s population is engaged in agriculture and the country has in the past exported agricultural commodities to the world.
There is a need for the government to immediately take steps to provide fertilizer to the farmers and to revive the wheel of agriculture in the country by removing the problems and concerns of the farmers. Meanwhile, the long-term solution lies in reforming the urea market.
Most important, part of such reforms will require ending gas subsidies to the urea producers and charging import parity prices from farmers. The industry is ready to pay the weighted average cost of gas supplies if urea prices are deregulated and producers are allowed to export their surplus production. The government should grab this opportunity to reform the urea sector.
