Three Fertiliser plants powered by Sui Northern Gas Pipelines Limited (SNGPL) Dawood Hercules, Pak Arab and Engro with a monthly production capacity of 200,000 tonnes will shut down for an indefinite period owing to gas load shedding, General Manager, Sui Northern Gas Pipeline Ltd, Rehan Nawaz told Business Recorder here on Sunday.

He said that supply of natural gas to SNGPL has been curtailed from various gas supply networks which are going through phases of annual maintenances. Therefore the Gas Company could not resume gas supply to these urea production plants which were closed last month.

However, he said SNGPL has resumed gas supply to Agritech Daudkhel in Mianwali district from Khyber-Pakhtunkhwa gas fields, as it is a small urea manufacturing plant.

A worried senior official of Punjab Agriculture Department said that shut down of these urea plants will cause huge urea shortage for sowing and maturing of Rabi crops including the staple food wheat.

He said Punjab needs at least 3.35 million tonnes of urea for the Rabi crops (from November to March) in addition to the DAP fertiliser. However, the remaining plants are producing urea about 80 percent of their capacity. The Federal Government has also not taken a firm decision about the import of the fertiliser which is inducing the fertiliser distributors to profiteering and hoarding.

According to spokesmen of fertiliser companies, fertiliser companies on the SNGPL network which included Pak Arab, Dawood Hercules and Engro`s new plant had been receiving average 70 to 80 percent of their allocated gas supply since Sept 5, 2011, and the uninterrupted supply helped decrease urea shortage and brought its prices down across the country. However, the recent cut of gas supply has disturbed the urea supply and the downward pricing trend.

The urea market experts say that government would have to import at least 700,000 to 800,000 tonnes urea in the next two months if not more to meet urea demand in Rabi, requiring minimum foreign exchange of at least US$ 320-428 million and subsidy of at least Rs.17-23 billion.

They said due to the low domestic production of urea, there will be a revenue loss of Rs.40 billion to fertiliser companies while the national exchequer will lose Rs.10 billion in taxes. The urea shortage has led to black marketing, as farmers are now paying between Rs.1,800 and Rs.2,000 per bag.

As a result, urea market prices which have already doubled in a year will reach higher levels during the Rabi season increasing wheat crop's cost of production and impacting its yield.

Meanwhile various associations of farmers have called upon the government to announce minimum prices of essential commodities like wheat, cotton, rice and sugar cane to sustain the agriculture sector and support the small farmers.

Talking to this scribe spokesman Kissan Board of Pakistan Haji Mohammad Ramzan said that rice, cotton/textile and sugar millers and fertilisers manufactures have been fleecing the farmers for a long time.

He said the sugar millers have not yet cleared dues of the sugar cane growers for the last crop whereas crushing season of the new crop is to start soon.

He said the cost of agri inputs has more than doubled in a year, yet it is an irony that the cotton growers are being paid Rs.2,500 for 40kg seed cotton (phutti) this year against the last year's price of Rs.5,000 per 40kg maund, and 50 percent less than the last year's price.

SOURCE: BUSINESS RECORDER