LAHORE: Escalating geopolitical tensions in the Middle East, combined with disruptions to Qatari gas exports and the closure of the Strait of Hormuz, have caused a significant shock across global fertiliser markets.
The Gulf region, which accounts for nearly one-third of the world’s urea exports, has experienced a sharp decline in production and logistics capacity, resulting in severe supply shortages and unprecedented price increases.
International urea prices have increased to $740-750 per tonne, reflecting the combined effects of feedstock shortages, shipping disruptions, and rising market uncertainty.
For economies reliant on imports, particularly in South Asia, the crisis has caused delayed shipments, decreased availability, and significantly higher procurement costs,” worries a senior executive of the Fertiliser Manufacturers of Pakistan Advisory Council — a collective forum of all major fertiliser producers in Pakistan, in an interview with Dawn.
For Pakistan, where urea is a vital input for staple crops like wheat and rice, the implications are considerable.
Current estimates suggest the landed cost of imported urea is between Rs13,700 and Rs14,700 per bag, compared to the domestic price of approximately Rs4,400 per bag.
This margin, more than three times higher, underscores the extent of exposure managed through domestic production.
DAP imports vulnerable to supply disruptions At the core of this resilience is Pakistan’s local fertiliser industry.
By utilising domestic gas resources and established production infrastructure, local producers have maintained a continuous supply, protecting farmers from global price fluctuations.
Currently, the....
