As the gap between demand and supply widens for the most essential plant nutrient, urea prices have risen above Rs. 4,000 across the province of Punjab over the past several days.
According to news sources, the retail price of urea has increased from Rs. 4,000 to Rs. 4,050 throughout a number of cities and towns in Punjab, including Layyah, Dera Ghazi Khan, Pattoki, Jhang, Kot Addu, and Kamalia.
The peak of Kharif maize production coincides with the time of year when urea is applied to sugarcane, cotton, rice, and fodder crops, driving up demand and driving up prices.
Urea has new prices
Urea notified prices from various manufacturers, including Engro, FFC, and others, remain in the range of Rs. 2,900 to Rs. 3,200. However, the spread between the notified price and the actual selling price has widened for various reasons, including dealers recouping losses from low DAP demand.
It’s a tighter supply-demand situation because “domestic urea production has declined while there have been no imports so far,” a commodity market consultant told this correspondent. When the demand rises owing to Wheat cultivation in the Rabi season, he said, the price should remain above Rs. 4,000.
According to a study by Habib Metropolitan Financials from June 2023, urea production fell by 15% from April 2023 to May 2023, from 580,000 tonnes to 493,000 tonnes. However, demand rose by 12.5% when compared to the previous month. Because of these factors, the research recommended importing at least 200,000 tonnes of Urea before the start of the Rabi Season to ensure a sufficient supply of the vital fertiliser.
With reserves dwindling, traders are hoping the caretaker setup will take swift action to rein up prices by, for example, allowing for timely imports. The government’s attempts to guarantee food security and farmer prosperity across the country could be hampered by a possible Urea shortage during the Wheat sowing season if the appropriate measures are not implemented.
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