AIRLINK 180.86 Increased By ▲ 0.76 (0.42%)
BOP 11.67 Decreased By ▼ -1.42 (-10.85%)
CNERGY 7.50 Increased By ▲ 0.02 (0.27%)
FCCL 46.07 Increased By ▲ 0.89 (1.97%)
FFL 16.26 Increased By ▲ 0.20 (1.25%)
FLYNG 27.24 Decreased By ▼ -0.19 (-0.69%)
HUBC 132.07 Decreased By ▼ -1.17 (-0.88%)
HUMNL 13.02 No Change ▼ 0.00 (0%)
KEL 4.57 Increased By ▲ 0.12 (2.7%)
KOSM 6.10 Increased By ▲ 0.13 (2.18%)
MLCF 59.17 Increased By ▲ 0.36 (0.61%)
OGDC 221.38 Increased By ▲ 2.79 (1.28%)
PACE 5.87 No Change ▼ 0.00 (0%)
PAEL 45.54 Increased By ▲ 2.92 (6.85%)
PIAHCLA 17.96 Increased By ▲ 1.46 (8.85%)
PIBTL 10.18 Increased By ▲ 0.26 (2.62%)
POWER 11.85 Decreased By ▼ -0.10 (-0.84%)
PPL 184.09 Increased By ▲ 1.01 (0.55%)
PRL 36.54 Increased By ▲ 1.21 (3.42%)
PTC 24.96 Increased By ▲ 0.62 (2.55%)
SEARL 101.23 Increased By ▲ 5.41 (5.65%)
SILK 1.17 Increased By ▲ 0.02 (1.74%)
SSGC 37.26 Decreased By ▼ -0.05 (-0.13%)
SYM 15.20 Decreased By ▼ -0.88 (-5.47%)
TELE 7.80 Decreased By ▼ -0.08 (-1.02%)
TPLP 10.64 Decreased By ▼ -0.20 (-1.85%)
TRG 60.56 Decreased By ▼ -0.38 (-0.62%)
WAVESAPP 10.82 Increased By ▲ 0.03 (0.28%)
WTL 1.32 Decreased By ▼ -0.01 (-0.75%)
YOUW 3.71 Decreased By ▼ -0.06 (-1.59%)
BR100 12,332 Increased By 117.4 (0.96%)
BR30 37,772 Increased By 332.8 (0.89%)
KSE100 116,200 Increased By 663.4 (0.57%)
KSE30 35,906 Increased By 248.2 (0.7%)

Farmers have spent an identical amount on the two key fertilizers in the last three Rabi seasons. The pattern of spending meanwhile has not changed for many years now. Make sure you apply enough nitrogenous fertilizer, and then worry about the other types. Urea application has increased by over 10 percent year-on-year in the first 5 months of Rabi season, having stayed stagnant for the last two. DAP application, meanwhile, keeps coming down.

The urea to DAP application ratio at 3x for the latest Rabi season (with a month remaining) is the worst in recallable memory – and pales in comparison to the 5-year average of 2.1x. Balanced fertilizer application is not something Pakistan is known for, and from how things are shaping up so far, the upcoming Kharif season may well be the toughest yet, in terms of encouraging phosphate nutrient application.

Farmers’ purchasing power may well have increased over the years, but that clearly does not show in the fertilizer purchasing patterns. With a significant hike in wheat support price, there could be a case of few more bucks to spend around. It remains to be seen if that spending go towards improve the yields or buying more SUVs.

The DAP national average retail price for March 2021 was reported at Rs5417 per bag by the PBS in the latest weekly SPI. This is 58 percent higher year-on-year, and the highest ever recorded in the country’s history. For more context, just the increase in price of a bag of DAP in one year is more than a bag of urea itself.

To no fault of Pakistan’s own, DAP prices have skyrocketed, as the raw material Phosacid and Phosrock have both soared as global commodity prices move north. The prices may cool off a bit, but future Phosacid contracts do indicate that the relief won’t be a big one – as Phosacid continues to trade 60 percent year-on-year higher for September delivery.

Pakistan continues to import two-third of its DAP requirement and even the local production is highly dependent on raw material prices. It can be said with some degree of certainty that DAP off-take will take a massive battering at current rates. The government may have to prepone any likely decision on DAP direct subsidy – as the Kharif season will soon be here.

Comments

Comments are closed.