Pakistan: Gas crunch affects urea production, agriculture sector at risk

Lahore [Pakistan], July 29 : Pakistan's agriculture sector is on the verge of collapse as the nation battles to meet the demand for urea fertiliser, a crucial input for crop production, in the midst of a severe natural gas shortage, reported The News International quoting an industry official.
In a recent meeting, the fertiliser review committee (FRC), which keeps tabs on fertiliser availability and costs, issued a warning that the nation would run out of urea during both the current Kharif season and the impending Rabi season.
The FRC blamed the low domestic production capacity for the urea shortfall, which is caused by the fertiliser industry's lack access to natural gas. 70 to 80 per cent of the cost of making urea is borne by natural gas.
"The writing is on the wall and the warning about persistent urea shortage has become more evident from the lingering issue stemming from paucity of natural gas, which is the main input for fertilizer industry," said one of the stakeholders who attended the FRC meeting, as per The News International.
The News International, published is an English language newspaper based in Pakistan.
All provinces officially brought up the issue of urea shortage at an important meeting held last Monday. Urea now costs roughly Pakistan Rupee (PKR) 3,000 per 50-kilogram bag, up from around PKR 2,600 at the beginning of the Kharif season. To get agricultural input at the official price, nevertheless, is challenging. Instead, the nutrient is being offered in Punjab for as much as PKR 3,300 a bag and in Sindh and Balochistan for between PKR 3,700 and PKR 4,000 per bag. The price increase for urea has also been criticised by farmers in Khyber Pakhtunkhwa.
By the end of the Rabi season in 2023–2024, there will reportedly be a urea shortfall of 0.2–0.6 million tonnes. Natural gas shortages once plagued Punjab's industrial facilities.
However, bigger plants in Sindh are currently struggling with low pressure and reduced supplies, which has a significant impact on the production of vital farm nutrients.
Punjab has estimated 2.35 million tonnes of urea and 0.8 million tonnes of DAP for the current Kharif season. In June, Punjab must face a 16 per cent reduction in urea availability. Overall, Punjabi farmers are receiving 13 per cent less urea this season.
Because many farmers cannot afford to purchase expensive DAP, dealers' mandated pairing of urea and DAP has resulted in low purchases by farmers. Additionally, this has led to a low urea off-take.
Rainy weather saved authorities by preventing a full-blown crisis by reducing demand for the chemical fertiliser, which helped to offset the constrained supplies and price increase of urea.
Rain replaces the moisture in the soil while also bringing nitrogen to the plants by capturing it from the air.
To meet the current demand for fertilisers, Punjab has asked the nation's urea facilities, including those located in the province, to be operational. The province's urea production facilities have played a significant contribution in this regard.
Punjab owns a 50 per cent share of the entire amount of imported urea that is being used to close the supply-demand gap.
If immediate corrective action is not taken in response to the urea situation, major issues may arise in the upcoming months, market sources have warned.
If its supply is not guaranteed, they cautioned, the price of urea might rise to as much as PKR 4,500 to PKR 5,000 per bag. The seeding of paddy and other standing crops has already been severely impacted by the current gap and artificial price increase.
But a much worse problem is about to emerge. Stakeholders have cautioned that if urea is not made available beginning in November or December, wheat seeding and its productivity may suffer. A participant stated, "We see a shortfall of 0.2 million tonnes of urea in high demand December 2023," The News International reported.