Urea shortage is looming large during the Rabi season as National Fertilizer Development Centre (NFDC) has forecast negative urea stocks for January 2019. According to NFDC report, Rabi season 2018-19 is expected to begin with 271,000 tons of urea and total urea availability will be 3.2 million tons with domestic production of 2.829 thousand tons and imports of 100,000 as allowed by the federal government to counter the shortage during Rabi 2018-19.
The NFDC of the Ministry of Food and Agriculture has forecast that only 85,000 tons of urea stocks will be available in December this year, while these stocks will be negative of 30,000 tons in January and some 15,000 tons in March in spite of the production started by two domestic urea plants and import of 100,000 tons of urea.
Although, the government has restored gas for two urea plants after one year, the country will face some shortage of the commodity in the mid of Rabi season. Both December and January are peak months for urea consumption for wheat and other crops. Urea stock must be at least 250,000 tons in these two months to ensure no isolated shortages take place in the country, industry sources said.
In order to ensure smooth supply of urea, the newly-elected PTI government has recently resumed gas to two closed urea plants for four months from September to December 2018 to increase domestic production, besides import of some 100,000 tons of urea by the Trading Corporation of Pakistan (TCP).
Together these measures were supposed to supplement urea supply in the country by 400,000 tons including around 300,000 tons additional production and 100,000 tons import.
Sources said these steps taken by the PTI government are in the right direction but woefully inadequate as domestic shortage cannot be addressed by creating availability of only 400,000 tons. The high domestic market price of urea in September is also reflecting that there is some shortage of the commodity.
Industry experts estimate that there is need for an additional import of 0.3 million tons of urea to prevent a disaster-like situation for the wheat crop. They said the government needs to take quick measurers for the import of urea to avoid shortage in the domestic market as urea stocks will be negative in January next year.
"The NFDC forecast of negative stocks of 30,000 in January 2019 indicates urgent need for additional import as import of 100,000 tons may be insufficient. The government needs to take quick action to prevent a disaster for the wheat crop and agriculture in the country," they added.
Shortage of urea in the main Rabi wheat sowing season will be a major setback for the agro-based economy of the country. Sources said the late allocation of gas to the two closed plants has further aggravated the urea issue. The approval for gas allocation for closed plants was decided by the Economic Coordination Committee (ECC) on 7th September. However, gas actually started flowing in last week of September, they maintained.
The third closed plant is also likely to start production, but it can only produce 9,000 tons of urea per month, as compared to the other two, which produce 79,000 tons per month.