INP-WealthPk

Fertilizer Imports Surge 32pc to $152m in Q3

May 23, 2022

By Arsalan Ali ISLAMABAD, May 23 (INP WealthPK): Pakistan meets 84% of its fertilizer requirement through local production, while the remaining is imported, reports WealthPK. According to the Trade Development Authority of Pakistan, all sub-sectors of agriculture and chemical group (insecticides, and plastic material) have shown growth. Fertilizer imports surged by 32% to $152 million during Q3 of FY2021-22 as against imports of $115 million in the corresponding period of FY2020-21. Quarter to quarter comparison shows that fertilizer import decreased by 43% in the Q3 of FY 2022 as compared to the Q2 of FY2022. Pakistan imported $267 million worth of fertilizer during Q2FY2022 as against import of $152 million in Q3FY2022. Insecticides and plastic materials showed an increase of 16% and 23% in Q3 of FY2021-22 compared to the corresponding period of FY2020-21. During F9MFY2022, import of agricultural and chemical products was worth $11,098 million as against import of $6,342 million during the corresponding period of F9MFY2021 showing an increase of 75%. Similarly, during F9MFY2022, fertilizer worth $675 million was imported compared with the import of $440 million during the corresponding period of F9MFY2021 showing an increase of 53%. Dr. Muhammad Asif, scientific officer at the Pir Mehar Ali Shah Arid Agriculture University, told WealthPK that urea scarcity due to smuggling has hampered agricultural productivity, as it is critical to increase the productivity of major crops. According to Dr Asif, urea shortage during the Rabi season was caused by a high price differential between local and international rates. He said environmental degradation had also affected per capita yield and that using urea had helped increase productivity. Urea imports put an additional burden on the farmers' input costs, he said, adding that its import also had an additional burden on the import bill. Fertilizer plants in Pakistan are operating at their maximum capacity, producing around 600,000 tonnes of urea per month. The average annual consumption is around 6.1 million tonnes equally divided between the Rabi and Kharif seasons. Pakistan has planned to import 200,000 tons of urea to mitigate the impact of any possible shortage during the peak Kharif demand amid the anticipated global supply disruptions due to the Ukraine crisis. Fauji, Engro, and Fatima fertilizer industries account for 48%, 34%, and 13% of urea production, while the rest of the companies contribute just 5% to the production. The major fertilizer companies are Fauji Fertilizer Bin Qasim Limited, Fauji Fertilizer Company Limited, Engro Corporation Limited, Engro Fertilizer limited, Fatima Fertilizer Limited, Fatima Fertilizer Company Limited, Arif Habib Corporation Limited, and Dawood Hercules Corporation Limited. Fertilizer plays an important role in raising crop productivity. About 52% of fertilizer is used in the Rabi season and 48% in the Kharif season when cotton, rice, maize, and sugarcane are planted. In Pakistan, climatic conditions favour insect infestation and diseases, causing 50% losses. To minimize these losses, use of synthetic pesticides is thought to be the only solution. The following steps should be taken to enhance fertilizer production. First, the government should stop urea smuggling, which will help reduce the burden on the import bill because the increased import of chemical groups depletes the forex reserves. Second, the government should subsidize fertilizer industries and provide R&D to meet the estimated target of fertilizer products. Third, due to climate resilience, demand for chemical groups has increased. The fertilizer industry should use those ingredients which are environment- friendly and have less effect on the soil productivity.