Karachi, September 07 – In a significant development, Pakistan finds itself as the only country among the top five global urea consumers—comprising China, Brazil, the USA, and India—that is not actively investing in expanding its production capacity over the next five years. This situation has emerged despite Pakistan facing a rapidly growing population.
The pivotal role of a robust domestic fertilizer industry has come into focus as it can potentially be a valuable partner for the government in achieving enhanced food security and agricultural exports, a core objective of the Green Initiative Pakistan.
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Brig Sher Shah, the Executive Director of the Fertilizer Manufacturers of Pakistan Advisory Council (FMPAC), highlighted the challenges faced by Pakistan, saying, “As fertilizer production in Pakistan has plateaued over time, the government is compelled to allocate significant amounts of foreign exchange for urea imports. To transform the agriculture sector under the Green Initiative, it is crucial to prioritize sustainable gas supplies for the fertilizer sector and address other pending issues. This move could facilitate the export of surplus production, bringing much-needed foreign exchange to Pakistan.”
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Brig Sher Shah emphasized the importance of a thriving indigenous fertilizer manufacturing industry in realizing sustained economic growth and the ambitious objectives of the Green Initiative Pakistan. He asserted that the fertilizer industry is ready to collaborate with the government to play a pivotal role in the upcoming green revolution, offering abundant and affordable urea supplies, promoting balanced fertilizer use, implementing improved agricultural practices, and upskilling farmers.
He also pointed to the success of the Fertilizer Policy 2001, which attracted approximately PKR 162 billion in investments for new plants and capacity expansions, resulting in an additional production capacity of nearly 2 million tons by fertilizer manufacturers. The industry has been committed to passing on the benefits of incentivized gas pricing under Fertilizer Policy 2001 to farmers by selling urea at a significant discount compared to international prices.
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Brig Sher Shah expressed support for the government’s efforts to combat black marketing and hoarding of urea. He stated, “These illegal activities drive up market prices for farmers and create a false perception that fertilizer manufacturers are earning excessive profits. The industry’s earnings are in line with other key sectors of the economy, and it has consistently shielded farmers from higher international urea prices, contributing significantly to the country’s food security.”
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He further shared that improvements in crop support prices and the availability of domestically produced, cost-effective urea have led to a considerable enhancement in farm economics. Current data shows that a farmer can exchange one urea bag for approximately 30 kilograms of wheat, whereas in previous years, it was exchangeable for 58 kilograms. Contrary to the common belief that urea constitutes a significant portion of farmers’ expenses, the cost of urea accounts for only about 7 percent of wheat production costs per acre. Based on field surveys, urea also represents a minor cost, approximately 3 percent, of a farmer’s total household expenditure.
