LAHORE: After snapping supplies to the market for almost a week, the industry on Tuesday increased urea prices by Rs80 per 50kg bag — from the current Rs1,768 per bag to Rs1,850 — citing inflationary pressure and high gas costs.
The industry was seeking an increase of Rs150 per 50kg bag while one of the manufacturers was insisting on a hike of Rs250 per bag.
After detailed talks with the government, the industry was finally allowed to increase the prices by Rs80.
Beyond this officially declared increase, the market, however, is still much higher and urea is selling at Rs2,600 in most parts of the country. “The price has risen for three reasons during the last few weeks,” explained Muhammad Sami, a fertiliser market watcher.
The industry stopped supply in the last week or so, putting pressure on the government and market to allow an increase. With the Kharif season entering its high demand season (due to urea application on rice and cotton), supplies came under pressure. “This high demand and snapped supplies created space for the hoarders to add to the market squeeze, pushing prices high,” he explained.
In this situation, the Rs80 jump was meaningless, unless the industry or dealers used it as an excuse to jack up prices further, said Mohammad Ramzan, a dealer from Lahore. The real challenge for the industry and the government would be to make urea available to farmers at this rate.
The major players have been selling urea between Rs2,018 and Rs1,918, while the government on May 16 fixed the price at Rs1,768 per bag.