ISLAMABAD: The fertiliser industry of Pakistan is providing urea at around 75 percent discount, equivalent to Rs 5,000 per bag, to international prices owing to a farsighted and consistent government policy.
Fertiliser industry expresses its gratitude to the prime minister of Pakistan and his team for creating enabling environment for indigenous fertiliser production at sustained affordable prices leading to improved economic well-being of the farmers.
It was through operations of all plants including the SNGPL-based urea plants that domestic production will meet the annual urea demand of approximately 6.2 MT that at current prevailing international prices resulting in Forex saving of US $4.3 billion with an additional saving for farmers from burden of approximately Rs 600 billion by providing locally-produced urea at Rs 1,768/bag instead of Rs 7,600/bag of imported urea.
The Covid-induced global supply chain disruptions have resulted in record commodity prices and created severe urea shortages in several countries. However, the fertiliser industry in Pakistan has shielded farmers from steep price increases and protected their incomes through adequate and affordable supply of urea. Since last year, global urea prices have jumped by around 86 percent and are now at a landed equivalent rate of Rs 6,319/bag.
Meanwhile, urea prices in Pakistan are hovering around 2012 price levels and Rs 4450 cheaper than international rates. Moreover, last year, the fertiliser industry supported the PTI government to lead the only PKR 400 per bag reduction in urea prices in the history of Pakistan.
According to Sher Shah Malik, Executive Director of Fertilizer Manufacturers of Pakistan Advisory Council (FMPAC), "By providing high quality products and services, the fertilizer manufacturers in Pakistan have always prioritized farmer well-being. To fully support the government's initiatives for agricultural growth, the fertiliser industry has been providing urea at now only one-fourth the price of international market. Due to significantly lower prices, the industry has delivered nearly Rs 300 billion in value to the farmers and averted a recurring balance of payment crisis through import substitution."
The government's far-sighted and consistent Fertilizer Policy 2001 has helped Pakistan become self-sufficient in urea production from being a net importer till 2012. The policy managed to attract Rs 162 billion in capital investment for capacity expansions and plant upgrades.
As a result, Pakistan has become self-sufficient in urea production with an annual production capacity of over seven million tons compared to the average demand between 5.8-6 million tons. The fertiliser industry of Pakistan remains committed to work with the government to ensure the country's food security through self-sufficiency, higher crop productivity, and improved returns for the farmers.
Copyright Business Recorder, 2021