Urea shortage: 'farmers may face Rs 150 billion loss during Rabi, Kharif seasons'

Continued urea shortage and its black marketing may cause an accumulative loss of rupees 150 billion to the farmers both in the Kharif and Rabi season, Khalid Mir, Vice-President Engro Fertilisers said. In the wake of continued reduced gas supply to fertiliser manufacturing units in the country, farmers may face acute shortage of it in the Rabi as well as Kharif season, which will adversely affect wheat production and thus pose serious food security concerns for the country, he said.
Talking to reporters at an Iftar reception, Mir said around 3.25 millions tons of urea is needed for the Rabi season as it is mostly consumed during the month of November and December. It is estimated that the government has to import one million tons of urea to meet the domestic requirements, therefore, order of urea import for Rabi should be placed forthwith. "We might be needing one normal vessel loaded with the urea after every five days in the month of September to meet the fertiliser requirement in the months of November and December. Around 900,000 million tons of urea is needed in December alone," he said.
He apprised that there are nine factories manufacturing urea and their production capacity is 6.9 million tons while our domestic requirement is 6.3-6.4 million tons, thus we are not only self-sufficient, but would have surplus amount of it if gas is provided smoothly. However, with the current gas curtailment policy, it is estimated that these factories would only produce around five million tons during the year thus creating the need of importing around 1-1.5 million tons of urea.
He said that Kharif season will end by September 30 and during this season farmers would face acute shortage of urea due to the gas curtailment policy besides paying higher prices. "Farmers have to pay Rs 300-400 per bag higher than the factory prices," he added. He warned that inventory might be equal to zero in the month of August and farmers might be facing more hardships during the Rabi season. Total requirement of Rabi season is around 3.25 million tons and the government has to import one million tons.
He said that December requires 900,000 tons while domestic manufacturers might produce only 300,000 to 400,000 tons. Four to five percent reduction in the urea application means loss of billions of rupees to the growers in terms of reduction in per acre yield, he said.
Mir claimed that farmers have to bear Rs 150 billion loss during the current year (both Khareef and Rabi seasons). He informed that they wrote a letter to the government on August 10 to make immediate arrangements for import of urea to meet the shortfall. He said that this import should be completed by October-November, adding that they are also meeting different farmers associations to raise voice in this regard.
He further said that the country needs US 500-600 million dollars to import this quantity of Urea and that fertiliser would cost Rs 2,900 per bag on landing. While at present, price of domestically produced fertiliser is Rs 1,378 per bag. So the government has to give a subsidy of Rs 1,500 per bag which means a total subsidy of Rs 30 billion, he added.
Vice-President Engro Fertilisers warned that there would be no use of importing fertiliser if it is delayed. He said that the proposal should be floated in the next ECC meeting. "We need an inventory of 600,000 tons at the opening of Rabi season or face shortage of production which might pose a serious food security concern."
Replying to a question, he said if gas is fully restored to the local manufacturing then they could overcome the shortage by 80 percent. It is more beneficial for the government as it would neither spend precious foreign exchange on import of fertiliser nor give huge subsidy. Our first and foremost priority should be to ensure availability of urea to save our staple food ie, wheat, he concluded.