According to the analysis recorded by the Ministry of Finance FY2019, fertilizer is the most important (and an expensive) input contributing 30 to 50 percent to crop yield in Pakistan. Its share in cost of production of major crops is around 10 to 15 percent. Analysis also showed that the local production of fertilizers during 2018-19 (July-March) grew by 2.6 percent over the corresponding period of previous year. This increase is because of functioning of two urea manufacturing plants like Agritech & Fatima Fertilizer, as supply of LNG was available on subsidized rates. The supply of imported fertilizer also grew by 4.8 percent.
Therefore, total availability of fertilizer rose by 3.2 percent during fiscal year 2019. Total offtake of fertilizer nutrients was declined by 7.3 percent. Nitrogen offtake also declined by 2.89 percent and phosphate by 18.2 percent. Potash offtake registered a rise of 4.55 percent during 2018-19 (July-March). Reduction in fertilizers offtake was mostly because of its high prices, despite receiving subsidy from the Government of Pakistan. There was dissimilar type of subsidies offered during FY 2018-19 such as; implementation of uniform tax rate of 2 percent for all type of fertilizers, the Government of Pakistan ensured adequate supplies of urea in Rabi season by offering a subsidy of Rs. 1,292 per bag for 105 thousand tonnes of imported urea, local manufacturers have also subsidized Rs.714 per bag of urea as government provided cheaper feed gas and the government has presently operationalized two fertilizer plants, located at SNGPL network, by providing Rs. 916 per bag of urea subsidy for using LNG.
| Fertilizer Supply Demand Situation (000 Tonnes) | ||||||
|---|---|---|---|---|---|---|
| Description | Kharif (Apr-Sep) 2018 | Rabi (Oct-Mar) 2018-19 | Kharif (Apr-Sep) 2019 | |||
| Urea | DAP | Urea | DAP | Urea | DAP | |
| Opening stock | 316 | 190 | 115 | 729 | 135 | 599 |
| Imported supplies | 0 | 1,063 | 105 | 679 | 100 | 18 |
| Domestic Production | 2,698 | 374 | 2,923 | 354 | 3,217* | 360 |
| Total Availability | 3,014 | 1,627 | 3,143 | 1,762 | 3,452 | 977 |
| Offtake/Demand | 2,887 | 901 | 3,033 | 1,164 | 2,942 | 865 |
| Write on/off | -12 | 3 | 25 | 1 | 0 | 0 |
| Closing stock | 115 | 729 | 135 | 599 | 510 | 112 |
Analysis also identified that total availability of urea during Kharif 2018 was recorded 3.014 million tonnes comprising of 316 thousand tonnes of opening inventory and 2.698 million tonnes of local production. Urea offtake was about 2,887 thousand tonnes, leaving inventory of 115 thousand tonnes for Rabi 2018-19. Availability of DAP was recorded 1.627 million tonnes comprising of 190 thousand tonnes of opening inventory, 1.063 million tonnes of imported supplies and 374 thousand tonnes of local production. DAP offtake was 901 thousand tonnes leaving an inventory of 729 thousand tonnes for Rabi 2018-19. It is also important to note that the condition of agriculture in Pakistan during FY2018-19 remained subdued. On the aggregate, the sector increased by 0.85 percent, much lower than the target of 3.8 percent set at the beginning of the year. This under-performance of agriculture sector was mainly because of inadequate availability of water which led to a drop in cultivated area and a drop in fertilizer offtake. The crops sector experienced a negative growth (-4.43 percent as compared to the target of 3.6 percent) on the back of fall in growth of important crops by (-6.55) percent.
[ads1]
Sugarcane production fell by (-19.4) percent to 67.174 million tons. Cotton (-17.5 percent) to 9.861 million bales and rice (-3.3 percent) to 7.202 million tonnes while production of maize crop rose by 6.9 percent to 6.309 million tonnes and wheat growth was slightly higher (by 0.5 percent) to reach 25.195 million tonnes. Other crops having a share of 11.21 percent in agriculture value addition and 2.08 percent in GDP, explained growth of 1.95 percent mostly because of rise in production of pulses and oilseeds. Cotton ginning was declined by -12.74 percent because of decline in production of cotton crop. Statistics also showed that Rabi 2018-19 started with an opening balance of 115 thousand tonnes of urea. Domestic production during Rabi 2018-19 was 2.923 million tonnes. Urea offtake during Rabi 2018-19 was 3.033 million tonnes, as compared to 3.143 million tonnes of total availability, leaving a closing balance of 135 thousand tonnes for upcoming season. DAP availability was 1.762 million tonnes, which included 729 thousand tonnes of opening inventory, 679 thousand tonnes of imported supplies and domestic production of 354 thousand tonnes.
Offtake of DAP during Rabi season was 1.164 million tonnes, leaving a balance of 599 thousand tonnes for next season. Total availability of urea during Kharif 2019 was estimated at 3.452 million tonnes comprising of 135 thousand tonnes of opening balance and 3.217 million tonnes of local production and 100 thousand tonnes of imported supplies. Urea offtake was predicted to be almost 2.942 million tonnes, reflecting a closing balance of 510 thousand tonnes. Total availability of DAP will be 977 thousand tonnes against was expected offtake of 865 thousand tonnes leaving a balance of 112 thousand tonnes for upcoming season.