Inside Financial Markets
Highest-ever 5.1m metric tons of urea sold in 10 months - Inside Financial Markets

Highest-ever 5.1m metric tons of urea sold in 10 months

– Business Recorder

KARACHI: Fertilizer industry has sold 5.1 million metric tons of urea in the first 10 months of 2021 as compared to 4.6 million metric ton in 10 months of 2020, fulfilling the increasing domestic demand by supplying 10 percent additional urea as compared to last year.

Further, the fertilizer industry of Pakistan is providing urea at 83 percent discounted price which is equivalent to Rs 8,500 per bag as compared to the international prices enabled by the Fertilizer Policy 2001.

Executive Director of Fertilizer Manufacturers of Pakistan Advisory Council (FMPAC) – a representative body of the fertilizer manufacturers in Pakistan – Sher Shah Malik said the local fertilizer industry continued to ensure adequate and affordable supply of urea. However, an unprecedented level of discount to international prices has led to market manipulation and significant black marketing by middlemen/dealers. “The urea industry’s MRP is currently at Rs 1,768/bag, bus farmers are being sold urea at Rs 2,000/bag in various parts of the country as a result abnormal gains are being pocketed by dealers,” he added.

“The perception of shortage of urea in the market is not grounded in reality as the fertilizer industry has already sold over 5 million metric ton in the first 10 months of the year which is highest ever sold quantity of urea during the last 10 years”.

Furthermore, with continued operation of RLNG plants and adequate inventory levels, the fertilizer industry will be able to meet the full year demand of 6.3 million metric ton urea which will be a record high in the decade on the back of improved farm economics.

It is worth to mention here the government of Pakistan has recently issued an import tender of 100,000 ton urea while C&F prices are in the range of USD 900-1,000 per ton.

The FMPAC said imports of urea would have led to significant depletion of foreign exchange reserves and a sharp rise in current account deficit.

Syed Zaki Hussain

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Inside Financial Markets was a joint publication of Pakistan Stock Exchange (PSX)and Society of Technical Analysts Pakistan (STAP)