What's Happening?
Fertilizer usage in Pakistan has increased significantly, despite the recent floods that were expected to severely impact the agricultural sector. According to data from the National Fertilizer Development Centre, urea offtakes rose by 26% year-on-year
and 36% quarter-on-quarter, reaching 2.5 million tonnes in the fourth quarter of 2025. This increase is attributed to price adjustments, policy support, and shifting crop patterns rather than an expansion in cultivation or improvement in farm incomes. The rise in fertilizer use is largely driven by the Rabi season and advance buying by dealers due to attractive discounts. However, DAP offtakes declined by 21% year-on-year. The State Bank of Pakistan has revised its growth outlook upward, projecting real GDP growth for FY26 at 3.75-4.75%, citing improved performance in large-scale manufacturing and strong remittance inflows.
Why It's Important?
The increase in fertilizer usage, despite adverse conditions, highlights the resilience of Pakistan's agricultural sector. This development is crucial for the country's economy, as agriculture plays a significant role in GDP and employment. The rise in fertilizer use, driven by policy support and price adjustments, suggests that government interventions are effectively stabilizing demand. However, the mixed conditions on the ground, such as the decline in wheat sowing and the impact of floods on livestock and maize, indicate ongoing challenges. The shift towards oilseeds and pulses reflects farmers' adaptation to perceived risks, which could influence future agricultural trends and food security.
What's Next?
The future of Pakistan's agricultural sector will likely depend on continued government support and market adjustments. The Kissan Card and other policy tools will be crucial in maintaining farmers' access to inputs. The anticipated recovery in sugarcane production and the geographical shift in fertilizer demand could shape the sector's trajectory. However, potential water shortages and fodder price increases pose risks. Monitoring these developments will be essential for stakeholders to adapt strategies and ensure sustainable growth.
Beyond the Headlines
The rise in fertilizer usage amid challenging conditions underscores the importance of adaptive strategies in agriculture. The shift in cropping patterns and increased focus on less risky crops like oilseeds and pulses may lead to long-term changes in Pakistan's agricultural landscape. Additionally, the impact of floods on livestock and fodder supply highlights the need for comprehensive disaster management and resilience-building measures to safeguard the sector against future shocks.
