The urea and DAP demand has exceeded its domestic production and the National Fertiliser Corporation (NFC) has planned to install two new fertiliser plants to meet the local demand and save foreign exchange, it is learnt. According to documents made available to Business Recorder, the demand of urea has surpassed its domestic production due to growth in application of fertilisers and limited creation of additional fertiliser capacity in the country.
Pakistan has always been an importer of phosphatic fertilisers. Presently, there is only one DAP manufacturing plant having capacity of around 685,000m. tons per annum while the annual requirement of DAP in Pakistan is around 1,600,000m. tons. There is 915,000m. tons shortfall per year in the country. Similarly, the shortfall of urea is around 118,000m. tons per year.
According to projected demand and supply position of urea, the demand of urea is 6,698,000 m. tons while the supply stood at 6,580,000 m. tons in 2010-11. This year, there is shortage of 118,000 m. tons. Similarly, the demand of DAP is 1,664,000m. tons while supply is 685,000m. tons in 2010-11 year. There is 976,000m. tons deficit in this financial year. Existing production capacity and growth in the consumption indicate that there would be continuous shortage of urea and DAP fertilisers in the country.
By observing this situation, the Ministry of Industries and Production has assigned the task to M/s Arthur D Little to develop a comprehensive "National Fertiliser Strategy" for Pakistan for next 20 years. According to the study, the best option available to the government is to set up new fertiliser plants of 0.5 to 1 million tons capacity after 3-5 years. Keeping in view the recommendations of the consultant, it is necessary to set up new fertiliser plants. For this purpose to meet the increase in demand and to save foreign exchange/GoP subsidy, the NFC has planned to install ammonia/urea plant and urea/DAP complex in the country.
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