KARACHI:The current spate of inflation is an international phenomena and the government could not be held responsible for inflation in the country, rather it was taking various measures to minimize its impact on the common man.
“No doubt, Pakistan is experiencing one of the highest inflation, but it is a world issue. It shall not be fair to stamp it as government’s inefficiency. Every country is struggling to come out of the Covid-19 economic shocks and emerging issues,” said Engro Fertilizers Limited’s Chief Financial Officer, Imran Ahmed, during presser at Karachi Press Club.
He said Covid-19 caused huge production loss through out the world and also created shipment issues including unaffordable rise in freight charges breaking the supply chain—shortage of even food items was experienced by many counties mainly Europe.
The inflation had become a major challenge to the government but it was largely driven by international factors and Pakistan could not escape the impact.
The manipulation of prices by middlemen – from farm to consumers- was another serious challenge to the government in containing inflation. However, the government had already initiated various steps to minimize the role of middlemen, and provide the farmers easy and cheap access to the market to increase their earning and ensure sufficient supply of fruits, vegetable and other food items to the consumers at lower prices.
He also appreciated the government’s policies and efforts to strengthen the agriculture sector, especially the small growers.
“Over the last couple of years, government was working very hard to improve the living standard of farmers. Their income had significantly increased after subsidies on wheat and other crops,” he added.
He mentioned that the government’s support/subsidies to the farmers also added to food items’ prices. It was just impossible to make both sellers and buyers happy at a time.
CFO, Engro Fertilizers Limited Imran Ahmed defended that slight increase in the price of urea did not push the inflation as a farmer spent only Rs 2.6 of Rs 100 total cost of inputs.
“We have increased only Rs 50 per bag of urea at Rs 1750. It should be corrected, inflation in food items is not for urea cost,” he commented claiming that there was 181 percent increase in urea price, whereas local fertilizer industry had maintained urea price as it was in 2012.
In Pakistan, urea was being sold at 81 percent discounted rate against the import parity price of the commodity.
Against the subsidy received on gas, the local fertilizer industry did pass more benefit to the farmers. The fertilizer industry and the government were supporting the agriculture out of the box. Otherwise, the industry could earn huge profits through export of urea. As the result of this support, the farmers’ income had significantly increased and they wanted to spend more money on fertilizers for better yield.
In urea only, 22 percent increase in demand was witnessed this year. The fertilizer industry was playing vital role in Pakistan’s food security, he said.
“Fertilizer industry was ready to buy gas at the same rate as for cement and textile industry, if permitted to increase its production and export like other industries do,” he said.
Imran Ahmed said his company had planned to invest US $ 50 million next year for expansion.
He claimed that the government was seriously considering to bring national fertilizer policy 2022.