The fertiliser industry has opposed the government’s move to import 0.5 million tons of urea for Rabi season against its proposal of 0.3 million tons. Industry sources told Business Recorder on Monday that followed by new gas management plan, approved by the ministry of power, the fertiliser industry will get more gas for urea production during this winter compared to previous season and an import of 0.3 million tons urea will be sufficient enough for buffer stocks.
Last month, the Economic Co-ordination Committee (ECC) of the Cabinet had approved an import of 0.5 million tons of urea and accordingly, the Trading Corporation of Pakistan (TCP) had been asked to import the same quantity. “With adequate supply of gas, the industry is capable of producing some 2.5 million tons of urea during Rabi 2013 against the production of 2.1 million tons during Rabi 2012,” they said.
Industry sources claimed that the urea demand for this Rabi season will be easily fulfilled with domestic production and already planned import of some 0.3 million tons. “During Rabi 2013-14, started from October 2012, some 3.1 million tons of urea stocks will be available for domestic consumption against the demand of 3.0-3.01 million tons, which is based on higher estimation,” they said.
Total availability of the commodity during Rabi includes opening inventory of 0.3 million tons, local production of 2.5 million tons and an import of 0.3 million tons, deals for which have already been finalised and the urea consignments are arriving in different phases.
Sources said Fertiliser Manufacturers of Pakistan Advisory Council (FMPAC) – a representative body of local fertiliser manufacturers, has also opposed massive import of 0.5 million tons urea for ongoing crop season and sent a formal letter to the ministry of industries for reconsideration of planned import of urea. “Our estimates are always based on actual statistics and production/availability of urea estimates are on the lower side, while consumption estimates are on the higher side to avoid any shortage,” industry sources said.
Although, the cumulative demand of provinces is about 3.3 million tons for ongoing crop season, however our estimates indicate a requirement of 3.0-3.1 million tons. During Kharif this year provinces’ demand stood at 3.2 million tons, however the actual urea sales were 2.9 million tons as projected by the industry, they said. The regular and sufficient supply of gas has already enhanced the domestic urea production as fertiliser plants have produced some 2.5 million tons of urea during Kharif 2013 compared to 2 million tons in Kharif 2012.
“FMPAC has opposed the huge import of urea in several meetings of stakeholders as it believed that fertiliser availability situation would ease significantly in coming months supported by improved gas supply to the SNSGPL-based urea plants,” an official said. On behalf of the industry, FMPAC urged the government to avoid massive import of urea and focus on domestic production and supply gas to fertiliser plants on a priority basis, he added.
“We have suggested an import of 0.3 million tons that will be sufficient enough to create a buffer stock and avoid any shortage in the domestic market, instead of planned quantity of 0.5 million tons for Rabi season,” he said. The ministry of industries is seriously considering our suggestions regarding urea import and assured us to review the import quantity, he added. He urged the government to reassess the requirements of urea import, especially keeping in view the current situation, to save precious foreign exchange required for imports and also give subsidy to lower price of imported urea.