Urea price on Thursday shot up by Rs 70 per 50 kg bag in the domestic market in the wake of recent gas tariffs rise by 31 percent, market sources said. Being an essential input for crops, it is becoming costlier. Analysts say the rise in its prices as a direct impact on growth of different crops across the country.
Sources said, "the leading urea companies including Fauji Fertiliser and Engro Pakistan have raised the urea commodity prices by Rs 35 to Rs 625 per 50 kg bag which earlier stood at Rs 590 per 50 kg bag.
It was reported that some dealers were selling urea at Rs 660 per 50-kg bag owing to shortage of the commodity in the market. Sources said that fertiliser companies have raised the price in consultation with the government. Industry sources said that producers have increased the commodity''s price to dilute the impact of gas tariffs rise on industrial cost and pass the burden on to the growers.
They said that at present local market is facing some shortage of urea due to high demand, whereas the local urea producers are unable to meet this demand. However, some new urea plants are under construction to cater to the growing demand. At present, local urea production stands at some four million tonnes annually against the demand of 4.5-5 million tonnes in the country.
Fauji Fertiliser operates four plants capturing 60 percent of the market share with production of about three million tonnes annually. Engro is in the second position, producing some one million tonne urea annually. The remaining gap between supply and demand is filled up with imported urea.
The government provides some Rs 1,000-1,200 per 50-kg bag subsidy on imported urea to ensure availability of the commodity at a reasonable price to growers. Urea is being imported at Rs 1,600-1,700 per 50-kg bag, while importers are selling it at Rs 625 per 50-kg bag.