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Tuesday, September 22nd, 2020

Urea shortage on the verge in Rabi season – Alfalah Securities Limited

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by September 12, 2011 Brokerage

Karachi: The fertilizer sector is facing continuous fears of urea shortage in the upcoming Rabi season, owing to surging gas curtailment which has hampered urea production in the country.

According to Alfalah Securities Limited, at present, the fertilizer sector is getting a gas supply of only 175 mmcfd which is not even 80% of their allocated supply of 240 mmcfd (actual: 72.9%) and is feared to result in a shortage of 1 million tons of urea in the Rabi season in which the highly important wheat crop is sown.

The management of Sui Northern Gas Pipelines limited (SNGP) has also informed that the fertilizer units may have to face a complete shutdown of 60 days in the winter season as compared to a 45 days closure of production in the corresponding period last year. Moreover, the prevailing floods in Sindh have damaged the crops of essential food items which would worsen the availability of food in major parts of the country and would also result in a price hike. Fertilizer manufacturers have argued that gas should be supplied to their units on priority basis after being supplied to domestic users, as the amount being spent on importing urea is much costlier than importing diesel and furnace oil which can be used as an alternative fuel by the textile and other industries.

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