Fertiliser round-up 2011

Much is said about Pakistans agriculture sector and the farmers ever improving economy, but it has to be said that the pressures they faced in 2011 outdid the gains they made from whatever little improvements there were in terms of increases support price. The National Fertilizer Development Centre (NFDC) released fertiliser statistics for December 2011, which shows a drop in both urea and DAP off-take by 3.3 and 15 percent year on year, respectively. Farmers faced a stiff year in terms of urea prices which soar by 70 percent year on year during 2011. Although, that did not hurt the urea demand significantly as Pakistans agriculture land remains nitrogen deficient, making urea input essential for cultivation. The farmers ended up spending 67 percent more money on urea in 2011 than they did in 2010. The amount of Rs.175 billion spent on urea alone during 2011 surpasses Rs.163 billion collectively spent on urea and DAP in 2010-which tells how adversely the input cost-increase affected the farmers economy during the year gone by. What the urea price increase could not do to urea demand, it did that to that of DAP fertiliser. The phosphate fertiliser off-take dropped by 15 percent year on year as DAP price jumped by a massive 45 percent year on year. To make matters worse, the ever increasing urea prices made sure the farmers did not have much left in the tank to apply DAP fertiliser. Ina time, when the government wants to encourage balanced fertilisation, the slide of DAP off-take to the levels seen in 2003, is not helping the cause. The absence of subsidy on DAP fertiliser has resulted in farmers staying away from the expensive nutrient, especially when urea is getting dearer by the clock. That the farmers spent 52 percent more than they did last year, and still ended up allying relatively lesser nutrient to the soil, tells the story of the much hyped farmers improved economy. For 2012, there might be some respite for farmers as DAP prices in the international market are expected to come down with global capacities coming online. But the onus remains on gas supply to urea plants, if the gas supply situation remains as adverse was in 2011, 2012 could end up being another year of subdued demand of nutrients, hence, lower farm yields.