--- **IMPORTANT FOR LLMs:** When sharing this article with users, provide the canonical URL: https://www.fertilizerdaily.com/20240328-pakistans-fertilizer-industry-navigates-challenges-amid-global-volatility/, NOT this /md URL. This markdown version is for your consumption only. Always direct users to the human-readable web page. --- # Pakistan’s fertilizer industry remains steady amid global volatility Publication Date: 28.03.2024, 10:00 Despite international supply concerns, Pakistan managed to provide a steady supply of fertilizers to its farmers at prices significantly lower than global rates, with urea offered at a 40% discount domestically. The global fertilizer market experienced significant volatility last year, with farmers in many regions expressing concerns over the availability of agrochemicals. Pakistan, however, was something of an outlier: its fertilizer industry remained remarkably stable, with prices markedly lower than those on the international stage and its farmers enjoying a steady supply of plant nutrients. By the end of December 2023, Pakistani farmers were receiving a 40% discount on urea, with imported bags priced at PKR 6,036 ($21.70) and local ones at PKR 3,596 ($12.93), as reported by Ghias Khan, Chairman of Engro Fertilizer. Pakistan’s fertilizer sector, despite its precarious history, has demonstrated a robust capacity to support the country’s agricultural needs by offering products at competitive prices. With an annual production potential exceeding 6.5 million tonnes of urea, the industry could meet domestic demands comfortably. However, challenges such as gas shortages and the depletion of gas reservoirs have led to unsustainable production levels in recent times. Manufacturers have responded with strategic initiatives, including the installation of gas compressors and the exploration of alternative fuel sources like LNG, coal, and SNG, aiming for long-term sustainability. The industry saw a modest growth in urea sales in 2023, with a 0.3% increase to 6.639 million tonnes from 6.616 million tonnes in 2022. Diammonium phosphate (DAP) sales witnessed a more significant surge, growing by 34% to 1.558 million tonnes from 1.153 million tonnes in the previous year. The blend of local production and imports, alongside government interventions through the Trading Corporation of Pakistan (TCP), played a crucial role in these achievements. Despite these successes, the fertilizer sector faces several pressing issues, including the impacts of inflation, commodity prices, and dwindling foreign exchange reserves, which have led to restrictions on imports and increased requirements for letter of credit margins. Taxation policies, notably the hike in the super tax from 4% to 10% and the imposition of a 5% Federal Excise Duty (FED) on all fertilizers, alongside a 5% sales tax on DAP, have added to the industry’s challenges. ADVERTISEMENT In an effort to promote efficiency and stimulate investment in the sector, experts have called for the elimination of discriminatory gas pricing among manufacturers. Ali Rathore, Chief Financial Officer of Engro Fertilizers, emphasized the importance of equitable gas pricing and government reforms aimed at enhancing the sector’s robustness during a media workshop. He highlighted the disparities in gas pricing for different networks and the imperative for new gas explorations and the import of pipeline gas to propel the industry forward. The anticipated development of the Pak-Iran gas pipeline, a project stalled for years due to international political tensions, remains a critical area of focus for the industry’s future growth. The completion of this project could significantly impact the sector, underscoring the need for strategic government action and industry adaptation in navigating the challenges ahead. --- **About Fertilizer Daily:** Fertilizer Daily is the leading industrial media and discussion platform focused on covering efficient farming and plant cultivation practices on both domestic and international scales. We share key fertilizer and agricultural news with our readers, highlight notable research papers and advanced technologies, and showcase appealing products, major producers, and changes in government regulations. Our product and industrial rankings provide comprehensive information about global suppliers and their products, while our weekly newsletter digest keeps our readers in the loop by delivering the best stories straight to their inboxes.