Crackdown against urea hoarding, smuggling: Market prices sharply decline

KARACHI: Market prices of urea for farmers sharply reduced by some Rs 500 to 600 per bag due to government’s crackdown against urea hoarders and smugglers.

The government’s crackdown against urea hoarding and smuggling has brought relief for farmers as the market prices for farmers have started to normalize in the domestic market.

Last week, the interim Federal Interior Minister Sarfaraz Bugti initiated strict action against culprits involved in the smuggling and hoarding of essential commodities, like wheat, sugar, urea and oil. According to Interior ministry report, more than 90 middlemen were involved in hoarding activities that caused artificial shortages and increase in fertilizer prices in the country.

As per reports about recent raids suggest that around 90,000 bags of fertilizers have been confiscated from various parts of Sindh, while more than 85,000 bags of fertilizers have also been recovered from different warehouses in Mirpurkhas.

Urea prices were rising due to due to illegal activities like hoarding and smuggling and rose to Rs 4200 per bag in various parts of the country compared to the retail price of Rs 3100 to 3400 per bag. The artificial shortage was created despite the government’s efforts to ensure uninterrupted gas supplies to all fertilizer plants so that they operate at full capacity to meet the country’s estimated annual urea demand of 6.8 million tons.

Appreciating the swift action of government authorities against illegal activities of hoarding and smuggling, Brig Sher Shah, Executive Director of Fertilizer Manufacturers of Pakistan Advisory Council (FMPAC) has said that the local fertilizer industry has always strived to ensure adequate and affordable supplies of urea for the farmers. However, some culprits in the market are involved in profiteering by selling urea around Rs 800 to 1,000 higher than the official price. Such illegal activities may force the farmers to pay additional Rs 100 billion on fertilizer purchases in 2023, he added.

“The crackdown against hoarding and sufficient production would help ensure a higher yield of wheat that is so essential for the food security of Pakistan,” he added.

He also commended the efforts of Dr Ijaz Gohar, caretaker Federal Minister for Commerce, Industries and Production, to ensure uninterrupted gas supplies to the fertilizer sector. The availability of consistent gas supplies would ensure sufficient fertilizer stocks for the upcoming Rabi season.

It may be mentioned here that country has sufficient production capacity to meet the domestic demand; however, the urea was unavailable in the country at its actual retail price due to hoarding and smuggling. Industry sources believed that the urea prices will more stabilize in the local market, if the crackdown will continue in the same spirit.

Copyright Business Recorder, 2023