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Agricultural Credit in Pakistan

In backdrop of the government’s priority for agriculture sector, Agriculture Credit Advisory Committee (ACAC) has set the indicative agricultural credit disbursement targets of Rs700 billion for FY 2016-17 to 52 participating institutions including 20 Commercial banks, 2 Specialized Banks, 4 Islamic Banks and 10 Microfinance Banks and 16 Microfinance Institutions/Rural Support Programs (MFIs/RSPs).

This indicative agriculture target is 17 % higher than the last year’s disbursement of Rs 598.3 billion. Out of the total target, Rs 340.0 billion has been allocated to five major banks, Rs 102.5 billion to ZTBL, Rs 139.6 billion to 15 Domestic Private banks, Rs 12.5 billion to Punjab Provincial Cooperative Bank Limited (PPBCL), Rs 60.1 billion to 10 Microfinance banks, Rs 11.0 billion to four Islamic banks and Rs 34.3 billion to 16 newly inducted MFIs/RSPs for FY 2016-17.

Agricultural Credit Disbursements Recent Trends

During FY 2016-17 (July-March), the banks disbursed Rs.473.1 billion which is 67.6 % of the overall annual target of Rs 700 billion and 22.7 % higher than disbursement of Rs.385.5 billion made during the corresponding period last year. The outstanding portfolio of agriculture loans has also been increased by Rs.45.3 billion i.e. from Rs.333.8 billion to Rs.379.1 billion with 13.6 % growth at end March 2017 as compared to same period last year. Despite having various real sector challenges, the overall performance of banks remained encouraging and witnessed 22.7 % growth in disbursement during the period under review.

Fifteen Domestic Private Banks collectively disbursed Rs 90.2 billion or 64.6 against their target of Rs.139.6 billion. Ten Microfinance banks have disbursed Rs.61.3 billion and as a group has already surpassed their annual targets while under Islamic mode of financing, Islamic Banks collectively disbursed Rs.8.4 billion or 76 % against their targets of Rs.11.0 billion to agriculture borrowers. Further, under MFIs/RSPs category Rs12.2 billion has been disbursed to small and marginalized farmers. The group wise performance of banks during FY 2016-17 (July-March) is summarized below in Table 2.19.

agricultulre growth percentage

Credit Disbursement to Farm and Non-Farm Sector

The sector-wise breakup of disbursements witnessed that the farm sector has received Rs.232.0 billion or 49 % while non-farm sector absorbed Rs.241.1 billion or 51 % during FY 2016-17 (July-March). Under farm credit sector disbursement, Rs.102.6 billion or 21.7 % were disbursed to subsistence landholding, Rs.46.1 billion or 9.7 % to economic holding, Rs.83.3 billion or 17.6 % to above economic holding category. However, in non-farm credit sector disbursement, Rs.155.6 billion or 32.9 % were disbursed to large farm while Rs. 85.5 billion or 18.1 % to small farms category. The increasing trend of the non-farm sector is mainly due to more opportunities for Agricultural Value Chain Financing (AVCF) especially in Livestock/Dairy and Poultry sectors. The sector-wise comparative details of credit disbursements are provided in Table.

agricultulre growth percentage

SBP’s Initiatives for the Promotion of Agriculture Financing

SBP, in collaboration with banks, federal & provincial governments, the farming community and other stakeholders have been encouraging banks to adopt agricultural lending as a viable business line. Recently a number of policy and regulatory initiatives have been taken to remove the bottlenecks and enhance access to financial services for the farmers, especially smaller ones. Some of the major initiatives are as under

  1. Framework for Warehouse Receipt Financing (WHRF)

    In accordance with the objective of improving the performance of the agriculture sector and to develop commodities’ physical trade and marketing system, SBP issued a draft framework for Warehouse Receipt Financing. The framework facilitates banks in development of specialized products for providing financing to farmers, traders, processors, and other players in the value chain. SECP in consultation with banks and other stakeholders has developed Collateral Management & Warehousing Rules for WHRF system in Pakistan. The regulatory framework for collateral management companies and warehouse operators are being finalized by SECP.

  2. Credit Guarantee Scheme for Small and Marginalized Farmers (CGSMF)

    SBP implemented the Credit Guarantee Scheme for Small & Marginalized Farmers, in line with the budgetary announcement 2014- 15.The CGSMF, with funding support of federal government, with the objective to sensitize financial institutions to lend to small farmers who do not have adequate collateral (acceptable to banks) in order to meet their working capital requirements. The scheme is providing 50 % credit risk coverage to Participating Financial Institutions (PFIs) on loans up to Rs 100,000 extended to small farmers having up to 5 acres canal-fed or 10 acres rain-fed land.

  3. Crop Loan Insurance Scheme (CLIS)

    To reduce the vulnerability of small farmers, SBP in collaboration with GOP introduced CLIS in 2008 for five major crops i.e. wheat, rice, sugarcane, cotton and maize for mitigating the default risk due to natural calamities and provide repayment assurance to banks. The scope of CLIS covers payment of insurance premium of the farmers with landholding up to 25 acres. Under the mandatory scheme, the government is bearing the cost of premium up to 2 % per crop per season.

  4. Livestock Loan Insurance Scheme (LLIS)

    was launched in November 2013 which covers all livestock loans up to Rs 5 million for the purchase of animals. Under LLIS, the borrowers are covered against the death of animals due to disease/natural death due to flood, heavy rains, windstorm and accidental death. Under this scheme, the GOP is bearing the cost of the premium (up to 4 % annum) of small farmers obtaining a loan from banks for up to 10 animals.

1. Livestock

Livestock contributed approximately 58.3% to the agriculture value added and 11.4% to the overall GDP during 2016-17 compared to 58.3 % and 11.6 % during the corresponding period last year, respectively. Gross value addition of livestock at constant cost factor of 2005-06 has increased from Rs. 1288 billion (2015-16) to Rs. 1333 billion (2016-17), showing an increase of 3.4 % over the same period last year.

Livestock has an important and crucial role in the rural economy and rural socio-economic development. Nearly 8 million families are involved in livestock raising deriving more than 35 % income from livestock production activities. It is central to the livelihood of the rural poor in the country. It is a source of cash income, providing a vital and often the only source of income for the rural and most marginal people. It can play an important role in poverty alleviation and foreign exchange earnings for the country.

The livestock population for the last three years is given in Table 2.21.

 growth percentage

The major products of livestock are milk and meat for the last three years is given in Table 2.22

 growth percentage  growth percentage  growth percentage

The population growth, increases in per capita income and export opportunities are fueling the demand for livestock and livestock products in the country. The overall livestock development strategy aims to foster "private sector-led development with public sector providing enabling environment through policy interventions”. The regulatory measures are aimed at improving per unit animal productivity by improving health coverage, management practices, animal breeding practices, artificial insemination services, use of balanced ration for animal feeding, and controlling livestock diseases of trade and economic importance. The objective is to exploit the livestock sector and its potential for economic growth, food security, and rural socioeconomic uplift.

2. Poultry

Poultry sector is one of the vibrant segments of livestock sector in Pakistan. This sector provides employment (direct /indirect) to over 1.5 million people. The current investment in Poultry Industry is more than Rs. 700 billion. Poultry has not only been a balancing force to keep a check on the prices of mutton and beef but also serving as the backbone of the agriculture sector, as it consumes over 7 million metric tons of agro-residues. Poultry meat contributes 31 % of the total meat production in the country. The commercial layer, breeders and broiler stocks showed estimated growth of 7.0 %, 5.0 %, and 10 % respectively while rural poultry developed @ 1.5 % when compared to 2015-16. The poultry has contributed 1.4 % in GDP during 2016-17 while its contribution to agriculture and livestock value-added stood at 7.1 % and 12.2 % respectively. The poultry value added at current factor cost has increased from Rs. 151.1 billion (2015-16) to Rs.162.8 billion (2016-17) showing an increase of 7.7 % compared to the same period last year. The estimated production of commercial and rural poultry and poultry products for the last three years is given in Table 2.24.

 growth percentage  growth percentage Government Policy Measures

Livestock Wing of Ministry of NFS&R with its redefined role under 18 the Constitutional amendment continued regulatory measures that included allowing import of high yielding animals, semen and embryos for the genetic improvement of indigenous dairy animals, allowing import of high quality feedstuff/micro ingredients for improving the nutritional quality of animal & poultry feed and allowing import of veterinary, dairy and livestock machinery / equipment at reduced duty rates in order to encourage establishment of value-added industry in the country.

Livestock Wing regulated the import of superior quality semen and high yielding exotic dairy cattle of Holstein-Friesian & Jersey breeds for genetic improvement of indigenous dairy animals. During 2016-17 (July-March), 556,565 thousand doses of semen and 9,123 exotic dairy cows were imported. The exotic dairy cows added approximately 70 million tons of milk per annum in the commercial milk chain/system

Livestock Wing also provided facilitation for export of red meat. A total of 41.286 thousand tons of red meat was exported during 2016-17 (July-Mar). The export of meat fetched the US $135.036 million. This meat was exported from private sector slaughterhouses. During same period export facilitation was also provided for livestock by-products like animal casing, bones, horns & hooves, and gelatin. The effort continued for market access with the concerned authorities of Russia, China, South Africa, Egypt, Hong Kong and Indonesia through the diplomatic channel for export of our meat and meat products.

In order to facilitate dairy farmer, duty-free import of calf milk replacer & cattle feed premix was allowed. During 2016-17 (July- March), 310.2 metric tons of calf milk replacer & 298.9 metric tons of cattle feed premix was imported. Similarly, to promote and encourage value-added livestock processing industry in the country, duty-free import of machinery for milk, beef, mutton & poultry processing was allowed.

During 2016-17 (July-March), the Animal Quarantine Department (AQD) provided quarantine services and issued 28,217 Health Certificates for the export of live animals, mutton, beef, eggs and other livestock products having a value of US$ 294.414 million. The AQD generated non-tax revenue of Rs. 103.232 million during 2016-17 (July-March) as certificate/laboratory examination fee of animal and animal products exported during the year.

In December 2016, Royal Friesland Company acquired 51 % of Engro Food Pakistan. This is one of the largest private sector Foreign Direct Investment in dairy sector of Pakistan amounting to an investment of US $ 450 Million.

Under new deal and 2020 strategy arrangements, Engro food will go for higher milk quality, a variety of milk packages and products and farmers’ capacity building leading to a reduction in poverty.

Moreover, to attract further investment in dairy sector, protect the small dairy farmers and the corporate dairy sector, beside discouraging import and mitigate use of synthetic milk and recipe products, regulatory duties to the tune of 25 % have been imposed on import of Skimmed Milk Powder (SMP) and Whey Powder (WP).

Future Plans

The Future Plans will continue to focus on

  1. Inter-Provincial Coordination for development of livestock sector,
  2. Coordination with private sector to promote value addition livestock industry and diversification of livestock products
  3. Controlling Trans-boundary Animal Diseases (FMD, PPR, Zoonotic diseases) of trade and economic importance through provincial participation
  4. Bringing more investments in livestock sectors.
  5. Exploring new markets for export of meat and dairy products with a focus on Global Halal Food Trade Market.

Fishery plays an important role in Pakistan’s economy and is considered to be a source of livelihood for the coastal inhabitants. Apart from marine fisheries, inland fisheries (based in rivers, lakes, ponds, dams etc.) is also very important activity throughout the country. Fisheries ‘share in GDP is 0.41% but has a value addition in export earnings.

During 2016-17 (July-March), total marine and inland fish production was estimated at 520,000 m. tons out of which 375,000 m. tons was marine production and the remaining catch came from inland waters. Whereas the production for the period 2015-16 (July- March), was estimated to be 501,000 m. tons in which 368,000 m. tons was marine and the remaining was produced by inland fishery sector.

A total of 103,277 m. tons of fish and fish preparations were exported during 2016-17 (July-March). Pakistan’s major buyers are China, Thailand, Malaysia, Middle East, Sri Lanka, Japan, etc. Pakistan earned the US $ 276.269 million. Whereas the export of fish and fish preparations for 2015-16 (July-March) was 92,046 m. tons amounting to the US $ 240.038 million. The exports of fish and fish preparations have increased by 12.20 % in quantity and 15.09 % in value during 2016-17 (July-March).

The government of Pakistan is taking a number of steps to improve fisheries sector. A number of the initiative are being taken by federal and provincial fisheries departments which include inter alia strengthening of extension services, the introduction of new fishing methodologies, development of value-added products, enhancement of per capita consumption of fish, and up-gradation of socio-economic conditions of the fishermen’s community.

I. Biological and Hydrological Research

During 2016-17 (July-March), samples of seawater collected from coastal areas were analyzed to determine parameters which affect fish distribution. Fish samples of different species were examined for the study of the length-weight relationship, sex ratio, maturity, food and feeding habit, and fecundity etc. Monitoring for fish landing to determine stock position was also carried out at Karachi Fish Harbor.

II. Quality Control Services

Marine Fisheries Department (MFD) is responsible to regulate quality and promote the export of fish and fishery products and to prevent the export of substandard quality of seafood products. In this connection, during 2016-17 (July-March), the Quality Control Section of MFD has issued 14,174 certificates of Health and Quality & Origin for seafood commodities exported from Pakistan

III. Turtle Excluder Device (TED) and Trials of TED by Local Fishermen

A training course on construction, installation, and use of TED was also conducted for the fishermen of shrimp trawlers. Fifty-Five fishermen including representatives of the other organizations participated in this meeting. The primary purpose of introduction of TED is to reduce the mortality of sea turtles in fishing nets and to fulfill the obligatory requirement of United States regulation for the export of shrimp to the USA. Pakistan is also a signatory to the FAO’s Code of Conduct for responsible fishing. The federal and provincial governments have assigned the task to the Maritime Security Agency for ensuring compliance with the TED on all the fishing boats in the sea.

IV. Modernized Fishing Fleets

To meet the requirement of EU and other importing countries, technical assistance in respect of modification of fishing boats was rendered to provincial governments and relevant stakeholders, as a result, a total number of 1300 fishing boats have been modified. Monitoring of modification is carried out by MFD.

V. Deep Sea Fishing

During the period under report, no deep sea fishing vessel was not in operation. As per direction Prime Minister’s Deep Sea Fishing Policy is being revised in consultation with all relevant stakeholders.

According to a policy brief by the Leadership for Environment and Development (LEAD) Pakistan, South Asia is expected to incur substantial losses in agricultural output, to the tune of 10-17 percent as a result of increases in average temperatures (of 2.3-4.5°c) and variation in precipitation. Climate change impacts agriculture though inducing uncertainties in the supply and availability of our water resources.

In Pakistan, per capita water availability has decreased by an over whopping 400 percent since 1947, leading to the conclusion that Pakistan is a water-stressed country: stresses are considered high if the value is above 25 percent so Pakistan’s figure is indeed exorbitant. Food security is also closely linked to water availability. There are different pathways through which climate change can affect agriculture. The results indicate a rise in long-term average temperatures, with significant negative consequences for agriculture, while precipitation variations show alternate signs depending on the season and region under consideration.

The policy brief suggests increased budgetary allocations for climate change actions and plans. The climate change impact in terms of losses in agricultural productivity is projected in the range of $6.94 to $30.34 billion by 2040. There is an urgent need to allocate resources to mitigate climate change commensurate with Pakistan’s vulnerability.

Average rainfall in Pakistan and Effects of Climatic Changes on Agriculture

Pakistan is located in a temperate region which accounts for most of its dry weather throughout the year. Mostly it is dry and hot with spells of rainfall in the months from July to September bringing some relief for the parched earth. The rains generally start in the late parts of June and continue till the beginning of October depending on the intensity of the South-West monsoon which is the main source of rainfall. The weather continues to remain oppressive as the rain does little to bring the temperatures down. Even if the temperature slips down a degree or two, the humidity present in the air poses discomfort for the people living in the nation of Pakistan. The average rainfall in the entire of Pakistan is measured to be around 255 millimeters which are very less considering the amount of land under farming. Most of the crops go to waste due to the low average rainfall in all areas of Pakistan. Even in the rainy season, all the parts of Pakistan do not receive an equal amount of average rainfall. In fact, some parts of the desert area of Pakistan receive little or no rainfall throughout the year.

The increasing effects of global warming on the agricultural climate in Pakistan are posing huge problems for the government and the people. Due to the increase in temperature and the scarcity of adequate rainfall, the agriculture in Pakistan is facing a severe crisis which can threaten to blow out of proportion if proper care is not taken in time. A single example which would greatly emphasize this point would be the statistics which show that the carbon emissions have increased 9-fold since 1980. This has led to a meteoric rise in temperature which in turn has given rise to a worse yield of crops. The agricultural climate which is ideally suitable for the perfect yield is far from being available which is evident by the declining growth of crops with every successive season. The scarcity of adequate rainfall poses drought problems which do nothing to help the yield. Another primary reason for the degradation in the agricultural climate seems to be the reduction in the forest cover over the entirety of Pakistan which seems to have further reduced the amount of rainfall which is generally expected in a calendar year.

Pakistan’s domestic production of tractor units has increased approximately 72.9% during FY 2015-16. Production soured to 37,938 tractor units as compared to 25,890 units last year. The tractors produced locally are under license agreements with foreign companies from the United States, Belarus and China. In addition to tractors, the United States and EU export used large-scale agricultural machinery to Pakistan, including harvesters.

The domestic industry has indigenous capacity to produce agricultural machinery and equipment to meet only 25% of the country’s total requirements. Production is expected to increase by 15 to 20% annually over the next 4 - 5 years as the local manufacturers, spurred by the increase in demand, gear their output and diversify their product lines. Most of the machinery is based on outdated technology and its efficiency is low. A wide variety of more sophisticated equipment is imported, but agriculturists prefer to have replacement and spare parts copied local due to the relatively low cost of domestically manufactured equipment.

Leading Sub-Sectors

In order to better develop the agriculture sector, the Government of Pakistan, both at the federal and provincial levels, has launched several programs and incentives to modernize the existing capacity. These initiatives include easy and long-term credit facilities, farmer education programs, and subsidized inputs. In addition, the government through budgetary support programs offers low taxation programs on agricultural machinery in an effort to boost agricultural modernization.

The most promising agricultural machinery export prospects for FY 2018 are:
  • Tractors
  • Combine Harvesters
  • Cultivators
  • Culti-packer
  • Harrow
  • Sub - soiler
  • Rotator
  • Broadcast seeder
  • Planter
  • Seed Driller
  • Fertilizer Spreader
  • Trans - planter
  • Drip Irrigation Systems
  • Weight Sorter
  • Round Baler
  • Sprayers
  • Irrigation Pumps
  • Pickers, Fruits, Hand, Base Metal
  • Diggers, Seeders
  • Sprinklers
  • Cotton Gins and Parts

Opportunities

With 46.2 million acres of arable land, there is great potential for improving efficiencies and productivity of the agriculture sector with better equipment and machinery. The Government of Pakistan is determined to support this sector, with the hope that Pakistan can increase yields and exports of grain, fruit and vegetables, poultry and dairy products, and in doing so become an important supplier for the region. To achieve this objective, the government is encouraging investment by offering low-interest financing. Both the public and private sectors have or are in the process of taking advantage of these incentives by setting up small to large-scale projects. According to industry experts, the local market will continue to offer sizeable business opportunities for local and foreign companies for the next several years.

As stated by the number of analysis overview reports, Fertilizer Industry of Pakistan is enormously fertile. Probably during 2018 Pakistan will become one of the biggest fertilizer exporters. Recently biggest fertilizer plant is made which have a strong impact on the socio-economic development of this country. In addition, this is an agricultural state due to which the use of fertilizer is a direct indicator of the growth of the agricultural sector. Hence the growth is approximately 8.5 per year. It is claimed that at the nationalization time, this major industrial sector didn’t get registered because the plants were very few in numbers. The progress rate of this industry shows it clearly that peoples in this field have done an exceptional job.

More than 14 factories are also manufacturing fertilizer such as Urea, Calcium Ammonium Nitrate, Ammonium Phosphate and Nitro Phosphate all these fertilizers have a direct and permanent impact on soil. Pakistan is a good exporter of urea fertilizer as this is assumed as highest grade fertilizer and it is widely accepted across the world. Urea fertilizer is manufactured by keeping in mind the soil type and for all types of crops.

Furthermore, it is an ultimate source of nitrogen for most of the cultivated soils. Currently, in Pakistan, there are six major producers of fertilizer these are:

Company List:
  1. Fuji Fertilizer
  2. Engro Crop
  3. Dawood Hercules
  4. Fatima Fertilizer
  5. National Fertilizer Corporation
  6. ICI Pakistan
The Economic Review of Fertilizer Sector:

The Economic Review of Fertilizer Sector:

Size of Industry

  • No. Of companies 6
  • No. Of Plants 14
  • Geographical Location of Factories

    Warehouses
    1. Mian Chunnu
    2. Faisalabad
    3. Khanewal
    4. D.G. Khan
    5. Dera Ismail Khan
    6. Sukuar
    7. Lahore
    8. Karachi
    9. Larkana
    10. Dadu
    11. Thatta
    12. Mirpur khas
    13. Nawabsha
    14. Multan
    15. Sheikupura

    Total Employment

    Direct employment

    31,000 people are directly employed in fertilizer sector.

    4139 people /day

    Indirectly employment

    Agriculture is the mainstay of Pakistan's economy. It accounts for 24 percent of the GDP and employs 48.4 percent of the total labor force.

    Total Exports

    Country eared US$ 26.372 million by exporting fertilizer during first quarter of current financial year as compared the exports of the corresponding period of last year.

    Products

    • Urea
    • Di-Ammonium Phosphate (DAP)
    • Calcium Ammonium Nitrate (CAN)
    • Ammonium Sulphate (AS)
    • Single Super Phosphate (SSP)
    • Nitro phosphate (NP)
    • Sulphate of Potash
    • Zinc Sulphate

    1. Urea

    More than 90% of the world’s production is destined for use as a nitrogen release fertilizer. Urea has the highest nitrogen content of all solid nitrogenous fertilizers in common use (46.7%).

    2. Di-Ammonium Phosphate (DAP)

    It contains 46% P2O5 and 18% N. it is water soluble. It is a good source of P fertilizer for all crops. Good source for problem soils. Overall, it suits to about 90% soil of the country.

    3. Calcium Ammonium Nitrate (CAN)

    Calcium ammonium nitrate (CAN) contains 27 % N and 20 % of ground limestone. This has a rapid as well as permanent effect. The granulation of this fertilizer ensures a quick and exact dosing.

    4. Ammonium Sulphate (AS)

    (NH4)2SO4, is an inorganic salt. It is used largely as an artificial fertilizer for alkaline soils. It lowers the pH balance of the soil, while contributing essential nitrogen for plant growth.

    5. Single Super Phosphate

    Superphosphate is a fertilizer produced by the action of concentrated sulfuric acid on powdered phosphate rock.

    6. Nitro phosphate (NP)

    It provides 22% nitrogen, and 20% phosphorus. Nitrogen is a primary nutrient that really makes plants "Grow”. Phosphorus is a primary nutrient that encourages rooting, blooming and fruit production in plants.

    7. Sulphate of Potash

    Potassium sulphate (K 2SO4)) is a non-flammable white crystalline salt which is soluble in water. This chemical is commonly used in fertilizers, providing both potassium and sulphur.

    Major Players in the Sector

    BRANDS

    1. Engro Chemical Company Ltd
    2. Fauji Fertilizer Company Ltd.
    3. Dawood Hercules
    4. Fatima Fertilizer Company Ltd.
    5. National Fertilizer Corporation

    1. FERTILIZER BY ENGRO CHEMICAL PAKISTAN LTD.

    Nitrogenous Fertilizers

    Engro UREA is a trusted, high-grade fertilizer which is suitable for all crops on all types of soils. Engro Urea is an excellent source of Nitrogen for the vast majority of cultivated soils of Pakistan.

    Phosphatic Fertilizers
    • Engro DAP: contains 46% P2O5 and 18% N. It is a good source of P fertilizer for all crops. It is an equally good source on problem soils. On an overall basis it suits to about 90% soils of the country.
    • Engro Zorawar: is one of the highest grade phosphatic fertilizers. It is acidic in reaction more than 90% is water soluble. It is a beneficial fertilizer for all crops on all soils of Pakistan and produces excellent results on alkaline soils, due to its acidic.
    • Engro Phosphate: is brown colored mono ammonium phosphate with 11%nitrogen and 52% phosphorus. It is being marketed as relatively cheaper alternate of DAP.
    Blended Fertilizers Blended Fertilizers
    • Engro Zarkhez: is homogenously granulated fertilizer which maximizes crop yield by providing balanced nutrition for a wide variety of crops through the uniform availability of Nitrogen, Phosphorous and Potassium. Fertilizers have low moisture content, high crush strength; 2mm-4mm granule size and free flowing nature -attributes which ensure excellent handling and application characteristics.
    • Engro NP: It provides 22% nitrogen, and 20% phosphorus. ECPL entered into NP business in 2005 to Primary focus area for ENP marketing is South Zone (Sind).
    Micro Nutrients:
    • Zingro: Zinc Sulphate, a highly effective, primarily targets Zinc deficiency in crops like Rice, Potato, Maize, Sugar cane, Wheat, Cotton, vegetables and fruits. Zingro increases crop yield and enhances crop appearance.

    2. FUJI FERTILIZER COMPANY LTD.

    • Sone Urea: most widely used fertilizer in the country. Fertilizer is white in color, free flowing, readily soluble in water and both contain 46% Nitrogen. Because of its high solubility, it is suitable for solution fertilizers.
    • Sona DAP: is the most concentrated phosphatic fertilizer containing 46% P2O5 and18% Nitrogen. It is the widely used phosphatic fertilizer in the world as well as Pakistan. The solubility of DAP is more than 95%. Its nitrogen to phosphoris ratio (1: 2.5) makes it an ideal fertilizer, to meet the initial requirement of most of the crops.
    • Sona SOP: This fertilizer is an important source of Potash, which is a quality nutrient for production of crops especially fruits and vegetables. Potash improves the resistance of the plants against pests, diseases and stresses like water.

    3. Dawood Hercules Chemicals Limited

    • Bubber Sher: The Company's principal activity is to produce urea fertilizer. The Company markets its urea under the brand name Bubber Sher.

    4. Fatima Fertilizer Company Limited

    • Nitro Phosphate
    • Nitrogen Phosphorous Potassium
    • Calcium Ammonium Nitrate
    • Urea

    5. National Fertilizer Corporation

    • Calcium Ammonium Nitrate
    • Nitro Phosphate
    • Single Super Phosphate
    • Zinc Sulphate

    Performance of Major Players

    Engro and FFC being the largest players of the industry enjoy being the price setters for fertilizers. They act as the barriers to new entrants and, the new comers will not just be facing an intense competition but also huge competitors. In this particular industry, there is no local trade association in the country. The country is the member of the International Fertilizer Association (IFA). Pakistan trade Union defense campaign (PTUDC) which works for safeguarding the rights of the workers.

    International Fertilization Association

    IFA developed a series of 12 principles for use in fertilizer operations globally.

    1. All members shall demonstrate leadership and management commitment with regards to safety, security, health and environmental issues in fertilizer production, distribution and sales.
    2. All members shall attempt for zero harm and adverse environmental impact whilst maintaining a healthy work place for all employees and contractual staff.
    3. All members shall ensure that safety; security, health and environment issues are integrated into their corporate policy and receive the highest importance and priority.
    4. All members shall ensure adequate financial and human resources for continual improvement of safety, security, health and the environment performance.
    5. All members shall comply with local safety, security, health and environmental laws and strive to embrace international laws and best practices as much as possible.
    6. All members shall establish and Improve their safety, security, health and environmental performance through annual objectives, targets or key performance indicators.
    7. All members shall establish adequate procedures and controls to ensure that safety, security; health and environment are not put at risk at any time or in any form.
    8. All members shall ensure that all employees and contractual staff have the right competence and are adequately trained and informed about safety, security, health and environment related to their specific activities, and shall encourage the participation of employees and contractual staff for further improvements.
    9. All members shall adhere to the principles of hazard and risk assessment In evaluating all their activities to ensure that safety, security, health and environment standards are continually enhanced.
    10. All members shall voluntarily share information with regards to experiences and lessons related to safety, health and the environment with all employees
    11. All members shall strive to subscribe to safety, security, health and environment management systems that will be subjected to internal and external auditing
    12. Pakistan's Implication: Pakistani government tends to cope up with the international regulation by providing full Safety and health measures for the organizations. Moreover by providing necessary training and awareness programs for the safety of employers. On the other hand the companies are also being enforced to obtain ISO certification to maintain the standard up to the international level.

    Major Problems Faced by the Industry:

    Anti-dumping Duties
    1. The contracting parties recognize that dumping, by which products of one country are introduced into the commerce of another country at less than the normal value of the products, is to be condemned if it causes or threatens material injury to an established industry in the territory of a contracting party or materially retards the establishment of a domestic industry. For the purposes of this Article, a product is to be considered as being introduced into the commerce of an importing country at less than its normal value, if the price of the product exported from one country to another.
      • Is less than the comparable price, in the ordinary course of trade, for the like product when destined for consumption in the exporting country
      • In the absence of such domestic price, is less than either
    2. In order to offset or prevent dumping, a contracting party may levy on any dumped product an anti-dumping duty not greater in amount than the margin of dumping in respect of such product

    Impact on Pakistani industry

    The dumping of foreign fertilizer has hindered the growth of the local industry and resulted in decline in its net margins and profitability. Engro Chemical's net Income in the first quarter of 1999 (January to March) eroded by 46 per cent to Rs.247 million, as against Rs.454 million during the corresponding period a year earlier. The drop in sales was due to imported urea. Excess supply of urea in the international market and the absence of any anti-dumping duties have made Pakistan a target for dumping by the producers in certain countries. According to market sources there is no custom duty or other tariff barriers against import of fertilizer and anyone is free to import. As a consequence, certain countries whenever facing problem in selling urea in international market, they finding more convenient to dump their products in Pakistan. In the present situation the fertilizer industry is falling under the pressure of declining prices and cost push pressures.