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If June 2020 does not end up throwing a massive surprise, fertilizer sales for the fiscal years are going to end at the lowest since FY16. Mind you FY16’s numbers were evened out in FY17, as there was clear anticipation among the buyers that the government would be announcing a sizeable subsidy on urea, which had help up off-take in the dying months.

This time around, there was no anticipation around. Mind you, urea prices are already lower than last year, and were seen hovering around Rs1650 per bag – down from Rs1820 per bag in Jan-May last year – that is 9 percent lower. The first two months of the Kharif season have been the worst in terms of off-take since FY16 as well – with urea sales of under half a million tons. DAP sales in 5MCY20 have so far stayed lower by 12 percent year-on-year, and the start to Kharif season in terms of DAP application, has also been on a low note.

The urea stockpile had touched a multi-month high of 1.1 million tons by the end of May 2020 – which is over three times higher than the inventory at the end of May 2019. Unless the June off-take has recorded a million tons in urea sales, Pakistan is all set for another fiscal year of lower urea application.

The Rabi crop harvesting and resultantly Kharif crop sowing was reportedly delayed in some areas, which could well be reflecting in low fertilizer off-take. One wonders if the loss already incurred on account of locusts’ attack, and the one feared with another possible attack, is keeping farmers away from excessive or even essential use of nitrogenous fertilizer at this stage.

The input cost on fertilizer has gone down, diesel has become cheaper, tubewell electricity prices have remained unchanged from last year, crop prices were decent – everything points towards a relatively better farm economy over last year. But if something is holding the farmers back from even the essential urea use, there is surely more than what meets the eye.

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GADA HUSSAIN sayed Jun 30, 2020 05:24pm
After announcement of subsdy by government , direct relief is offered to farmer since then by the fertilizer shopkeepers and still the UREA of both major companies is being sold at RS:1600 TO 1650 AND DAP FOR 3300 TO 3350 .NO VALID LEGAL RECIEPT IS ISSUED BY ANY SHOPKEEPER TO FARMERS IN RANIPUR., GAMBAT., SETHATJA , HINGIRJA AREAs..
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