The government is likely to subsidize imported urea for Kharif season by providing 50-kg bag worth Rs 900 on concessional rate to farmers. Well-placed sources told Business Recorder here on Monday that the urea price has increased to $540 per ton in the international market, which means the 50-kg bag is being sold there at Rs 2500.
"Obviously, after importing the commodity, the government can not sell the fertiliser at international price. It has to subsidize the commodity. That is why, it is likely to provide Rs 900/50-kg subsidy to make it affordable to farmers," sources maintained. They added, "It is true that the government has decided to curtail subsidies as per the terms and conditions of the International Monetary Fund, but here the government is forced to provide subsidy, otherwise, most of the farmers who lack purchasing power would not use fertiliser to enhance crops productivity and in the end, the country would lose the production targets.
Sources told this scribe that out of 25,000 tons imported urea, only 4500 has been provided to Punjab so far while the province, that is the mainstay of the country's agriculture, is suffering a shortage of 0.3 million tons of urea. Sources said the second consignment of urea 50,000 tons was expected to reach the country on July 25 but has not happened. The total urea requirement of Punjab for Kharif is 2.2 million tons while 1 million ton urea is required for wheat crop in Rabi especially in October and November. "In the first three months of Kharif, Punjab has received 9.72 lac tons while the local production of urea remained 1 million tons. Now the province is short of 3 lac tons, which it urgently needs before September.
Agri Forum Chairman Ibrahim Mughal told this scribe that every year 132 million urea bags (50-kg) are used in Pakistan. The cost of this quantity was Rs 112 billion a year ago that has now increased to Rs 224 billion. This is a 100 percent increase in price of urea in one year.
Sources said, "It is unfortunate that Pakistan has the world's largest single train ammonia-urea plant, Engro Fertilisers Limited, that has a production capacity of 1.3 million tons per annum and takes Engro Fertiliser's total annual urea production capacity to 2.3 million tons, even then we are forced to import urea due to shortage of gas.