Pakistan is the only country out of the top five major urea consumers – including China, Brazil, USA, and India – that is, unfortunately, not investing in capacity growth over the next five years, even though it is facing a rapid surge in population. A robust domestic fertilizer industry can prove to be an invaluable partner for the Government to help achieve greater food security and agricultural exports under the Green Initiative Pakistan.
“As the fertilizer production in Pakistan has stagnated over time, the Government is forced to spend increasingly significant amounts of valuable foreign exchange to import urea. To transform the agriculture sector under the Green Initiative, it is crucial to prioritize sustainable gas supplies for the fertilizer sector and resolution of other outstanding issues. It could potentially aid the export of excess production and earn much-needed foreign exchange for Pakistan,” Brig Sher Shah added.
Brig Sher Shah, Executive Director of Fertilizer Manufacturers of Pakistan Advisory Council (FMPAC) said that, “The importance of a strong indigenous fertilizer manufacturing industry cannot be underscored enough to achieve sustained economic growth and the envisaged goals of Green Initiative Pakistan. The fertilizer industry stands with the Government to play its pivotal role in the next green revolution through abundant and affordable supplies of urea, balanced use of fertilizers, improved agri practices, and upskilling of our hardworking farmers.”
He highlighted the success of the Fertilizer Policy 2001 in attracting around PKR 162 billion in new plants and capacity expansions of almost 2 million tons by fertilizer manufacturers. The industry has also wholly passed on the benefit of incentivized gas pricing under the Fertilizer Policy 2001 to the farmers by selling urea at a significant discount to international prices.
Brig Sher Shah also expressed support for the Government’s resolve to curb blackmarketing and hoarding of urea. “These illegal activities result in higher market prices for the farmers and create a false impression that fertilizer manufacturers are earning unreasonable profits. The industry earnings align with any other key sector of the economy. In contrast, it has always shielded the farmers from higher international urea prices and contributed towards the country’s food security.”
He shared that an improvement in crop support prices and availability of cheaper domestically produced urea have resulted in considerable improvement in farm economics. Data shows that, currently, a farmer can barter one urea bag to the equivalent of around 30kg of wheat, while in past years it was tradeable for 58kg. Contrary to popular perception that urea comprises a higher share of farmers’ costs, urea cost was around only 7 percent of wheat production cost per acre. Based on field surveys, urea also remains a minor cost of around 3 percent of the farmer’s total household spend.
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