Pakistan needs to encourage local production of pesticides

ISLAMABAD: Pakistan needs to encourage local production of pesticides to save the precious foreign exchange incurred on their imports, and provide the farmers with low-cost inputs to increase their productivity, WealthPK reported.

Pakistan largely imports pesticide acids and liquids which are then repackaged locally by the companies with their brand name for sale.
Pakistan’s pesticide sector’s value was estimated at $484 million during the first seven months of the fiscal year 2021-22, registering an increase of 15% over the same period of previous year when the industry’s value was $422 million.

Pakistan is not a producer of pesticides, and depends on imports of raw materials. Almost all the companies in Pakistan import the ingredients used in making pesticides.

During the first seven months of the fiscal year 2021-22, Pakistan imported pesticide products worth $103 million compared to imports of $95 million during the same period of last year, showing an increase of 8%, according to the Pakistan Credit Rating Agency (PACRA).

Mohammad Shoaib, Chief Executive Officer of Miraj Crop Science, which is based in Multan, told WealthPK that they import pesticide liquids and then repack them with their own company’s name. He also said that the imported liquid costs are very high, which ultimately translates into elevated rates of the finished product.

“If Pakistan can produce liquids, other raw material and acids locally, then the cost of the finished product will dramatically decrease,” said Shoaib.
Pakistan’s pesticide industry is composed of many small players. As per the latest report by the department of plant protection, 272 importers are listed in the country.
Currently, China is the largest single exporter of pesticides to Pakistan as it captures 90% of the local market.

The demand for pesticides is mostly generated from cotton and rice crops as both are important in terms of contribution to exports.
Because of dependence on imports of raw materials, prices of pesticides in Pakistan are always high as whenever prices increase internationally, the effect is felt in Pakistan.

The fluctuation in raw materials prices also affects the profit margins of local companies.
The average net margin in 2021 remained 4%.
However, the government has removed the 3% customs duty on import of pesticide raw materials to increase the local formulation of chemical compounds.

INP/