Urea prices have crossed Rs. 4,000 across Punjab over the weekend as the demand-supply gap widens for the most critical nutritional source for plants.
Well-informed sources told ProPakistani that urea’s selling price has jumped from Rs. 4000 to Rs. 4,050 at multiple destinations in Punjab including Layyah, Dera Ghazi Khan, Pattoki, Jhang, Kot Addu, and Kamalia.
The price surge is happening as the Kharif Maize cultivation is at its peak while Urea application on Sugarcane, Cotton, Rice, and fodder crops is also happening which is contributing to the demand increase.
It should be noted that the notified prices for Urea from different manufacturers like Engro, FFC, and others are still somewhere between Rs. 2,900 to Rs. 3,200 but the gap between the actual selling price and the notified price has widened as a result of a number of factors i.e. dealers recovering losses from low DAP demand among others.
“The domestic urea production has declined while there have been no imports so far which is resulting in the tighter supply-demand situation,” said a commodity market consultant talking to this correspondent. He added that the price is expected to stay above Rs. 4,000 during the Rabi season when the demand increases due to Wheat cultivation.
As per June 2023 report by Habib Metropolitan Financials, Urea production dropped by 15 percent as of May 2023 to 493,000 tons against 580,000 tons during April 2023. On the other hand, offtake witnessed a 12.5 percent increase compared to the previous month. In light of these, the report argued for importing at least 200,000 tons of Urea to ensure the ample availability of the crucial fertilizer ahead of the Rabi Season.
Traders are banking on the limited jurisdiction of the caretaker setup in taking decisive steps to curb the prices like allowing timely imports, especially in light of declining reserves.
Unless the necessary steps are taken, there are also significant chances of Urea shortage as well during the Wheat sowing season which can hamper the nationwide efforts by the government to ensure food security and farmers’ prosperity.
Source: Pro Pakistani