Until July 7, the government has dropped urea rates to Rs1, 769 per 50 kg bag, down from Rs1, 900-2,000 before. According to the notice, provinces and federal agencies are entitled to add an allowance to the notified rates to cover additional transportation expenses in rural or distant places.
Sunny Kumar of Topline Securities said concerned producers, dealers, or importers have until May 27 to submit their views and justifications, as well as necessary papers, statistics, and information, on fertilizer manufacturers’ recent price hikes.
According to him, Fauji Fertilizer, Agritech, and Fatima Fertilizer hiked urea prices by Rs165 per bag since March, while Engro Fertilizer boosted rates by Rs249 owing to inflationary pressures.
According to the government’s announcement, the recent price rise in urea was wholly unwarranted and without any solid justification, and it might have a negative impact on farmers and urea application during the current kharif season.
Mr Kumar believes that the industry would present reasons to the government for the price spike in urea, and that the SRO will be challenged in court. “The manufacturers can say that government should not interfere in free market where price is determined by supply and demand situation and they have passed on inflationary impact to urea prices,” he continued.
According to him, local urea prices are 70-80% lower than international pricing, which might lead to further smuggling and a urea scarcity in the home market, making local prices unsustainable.
The price announcement is in compliance with the Price Control and Prevention of Profiteering and Hording Act 1977, according to Sherman Research. The SRO goes on to say that quick action is necessary due to the current situation, which necessitates a national emergency in accordance with Executive Order 2021.
To read our blog on “Engro Fertilizers collaborates with Sindh Agriculture University for seminar on cotton production technology,” click here
