Pakistan: Gas crunch affects urea production, agriculture sector at risk

Subject: Science and technology

Section: Msc

Context:

Pakistan’s agriculture sector is on the verge of collapse as the nation battles to meet the demand for urea fertiliser, a crucial input for crop production, in the midst of a severe natural gas shortage.

Details:

The fertiliser review committee (FRC), which keeps tabs on fertiliser availability and costs, issued a warning that the nation would run out of urea during both the current Kharif season and the impending Rabi season.
The FRC blamed the low domestic production capacity for the urea shortfall, which is caused by the fertiliser industry’s lack access to natural gas. 70 to 80 percent of the cost of making urea is borne by natural gas.

Urea production:

Ammonia, which is an input of urea, is produced from natural gas.
- Ammonia (NH3) has been synthesized from natural gas. In this process, natural gas molecules are reduced to carbon and hydrogen.
- The hydrogen is then purified and reacted with nitrogen to produce ammonia. This synthetic ammonia is used as fertilizer, either directly as ammonia or indirectly after synthesis as urea, ammonium nitrate, and monoammonium or diammonium phosphates.
Ammonia is the second largest chemical product produced in the world, behind sulfuric acid. The demand for ammonia is driven by the demand for fertilizers. Of the world’s nitrogen demand, 85% is for fertilizer primarily derived from ammonia in the form of:
- Urea
- Ammonium nitrate
- Phosphate
- Sulfate
In several transformation steps, natural gas, essentially methane, is upgraded by combination with nitrogen from the air to form nitrogen fertiliser.
80% of the gas is used as feedstock for fertiliser, while 20% is used for heating the process and producing electricity.

What is the Status of Fertilisers in India?

India consumed about 500 LMT of fertiliser per year in the last 10 years.
The Centre’s fertiliser subsidy bill is set to soar by 62% over the budgeted amount to Rs 1.3 lakh crore in FY21.
Since non-urea (MoP, DAP, complex) varieties cost higher, many farmers prefer to use more urea than actually needed.
The government has taken a number of measures to reduce urea consumption. It introduced neem-coated urea to reduce illegal diversion of urea for non-agricultural uses. It also stepped up the promotion of organic and zero-budget farming.
Between 2018-19 and 2020-21, India’s fertiliser imports increased almost 8% to 20.33 million tonnes from 18.84 million tonnes.
In FY21, more than a fourth of the urea requirement was imported.
Need of Large Quantities of Fertilisers:
- The agricultural output of India has increased every year, and the country’s need for fertilisers has also increased.
- Despite imports, gaps remain between requirements and availability after indigenous production targets haven’t been met.