International prices for DAP fertiliser (Diammonium Phosphate) have more than doubled during the last one year. At this time last year, DAP could be purchased for approximately 300 dollars/ton cfr Karachi port. Today, if a fresh purchase is to be made, this price would be more than 700 dollars/ton cfr Karachi port.
Purchase price at this time last year equated to approximately Rs 1,050/bag of 50kg ex-Karachi port. Today, based on the 700 dollars/ton cfr import price, this has increased to approximately Rs 2,400 per bag of 50kg.
At this time last year, the Government of Pakistan was paying a subsidy of Rs 250/bag of DAP, thus the importers of DAP were selling the product at around Rs 800/bag of 50kg. The GoP increased this subsidy to Rs 470 per bag of 50kg during the course of the year. This only provided partial coverage for cost increases incurred by the importers. The subsidy of Rs 470/bag continues to-date.
However, it is quite insufficient to cater for the huge increase in international import price of DAP fertiliser. With the current import cost of DAP at Rs 2,400/bag, the importers can only afford to sell DAP at Rs 1,930/bag of 50kg (Rs 2,400 less Rs 470).
The prevailing prices in the local market are much lower than this due to large stocks with all importers and the resulting competition to sell. The GoP has been successful in encouraging a large number of importers to import and stock DAP, thereby creating competition and averting shortages of the essential fertilisers-PR