FFC has increased urea prices by Rs. 350 per bag effective from 1st July-2023, with retail prices now standing at Rs. 2,910 per bag. Meanwhile, FFBL has hiked its urea rate by Rs. 162 per bag to pass on the impact of FED, taking prices up to Rs. 3,212 per bag.
Urea Prices now Jump by Up to Rs. 350 per Bag. Fauji Fertilizer Company Limited (PSX: FFC) and Fauji Fertilizer Bin Qasim Limited (PSX: FFBL) have increased urea prices against the 5% federal excise duty (FED) on the fertilizer sector imposed by the government in the Budget 2023-24.
The Deputy Head of Research at JS Global, Waqas Ghani, told that, “This price increase exceeds the necessary adjustment to account for the impact of Federal Excise Duty (FED).
A similar announcement by Engro Fertilizers Limited (PSX: EFERT) is also expected.This surge in fertilizer costs could kill demand and hurt yields.
Fertilizer costs have more than doubled since January 2021, and the pricing trend is anticipated to go further up as mentioned above.
The price hike combined with an across-the-board withdrawal of domestic subsidies may give rise to smuggling and pivot more power to mafias running the urea market from down under.