KARACHI: A second vessel carrying some 45,000 metric tons imported urea has reached Pakistan for domestic consumption to avoid the commodity shortage on the domestic market during Rabi season.
The federal government, in November last year, decided to import urea to ensure the sufficient supply of fertilizer for the Rabi season. Accordingly, on Nov 24, 2023, the Economic Coordination Committee (ECC) of the Cabinet approved the import of 200,000 metric tons of urea on a Government-to-Government (G2G) basis from Azerbaijan.
As per agreement SOCAR-the state-owned company of Azerbaijan is supplying 200,000 metric tons urea fertilizer @ $388.50 per metric tons to Pakistan on a deferred payment mechanism without any interest or guarantees.
First vessel MV “Magma Fidelity” with 47,309 metric tons was arrived on Dec 20, 2023, while another ship namely “Lem Verbena” carrying 45,000 metric tons urea berthed on KPT on January 2, 2023 and discharging is likely to start today.
With the arrival of the second shipment, overall, 100,000 metric tons of imported urea has arrived in Pakistan for Rabi season. The imported urea is arriving from the UAE as SOCAR has bought urea from various international trading companies and shipped it to Pakistan.
Although the imported urea has reached Pakistan to meet the domestic demand in Rabi season, however, still the supply of imported urea to farmers has not started as the government has not fixed the end users price of the imported urea. On the other hand, there is a severe shortage of urea in the country and it is being sold at Rs 5,000 to Rs 6,000 per bag instead of government price of Rs 2500 per bag.
Industry experts have suggested that urea must be deregulated like DAP to ensure the sufficient supply and market-based price of the commodity. “There is a need for the government to abolish the gas subsidy on the production stage as farmers are not getting full advantage of billions of rupees subsidy,” they added.
Since Phosphates fertilizer was deregulated by the government about two decades ago there is no shortage of product in the domestic market, therefore, the government should deregulate urea. This step will help to end the shortage of the commodity and if the country produces more urea they can export and earn foreign exchange as well, they mentioned.
Now, the farmers are adjusted with new prices of urea by paying current market price because they are getting good returns for their crops. In addition, the country is using excessive Nitrogen in the form of Urea which is harming the soils.
They said there was some 2-3 million gap in production and demand of wheat this year, however, there is no shortage of the commodity as the government has allowed the private sector to import wheat. The private sector performed well and finalized deals of 2.5 million tons wheat, of which some 1.25 million has already arrived in Pakistan. Three more shipments of imported urea will arrive during January to complete the quantity of 200,000 metric tons urea for domestic consumption.
Copyright Business Recorder, 2024