The Economic Co-ordination Committee (ECC) of Cabinet has allowed immediate import of 200,000 tons of urea for Rabi season on a summary submitted by the Ministry of Industries (MoI), official sources told Business Recorder. “The Ministry of Industries has sought permission to import 500,000 tons for Rabi but the ECC allowed only 200,000 tons and constituted a committee under the chairmanship of Deputy Prime Minister, Chaudhry Pervaiz Elahi to work out modalities for subsidy,” the sources added.
Official documents showed that opening balance of urea in Rabi will be 465,000 tons, of which domestic production was 1.98 million tons and there was a stock of 300,000 tons of imported urea, totalling 2.745 millions tons. Urea demand for Rabi (October 31, 2012 to March 31, 2013 will be as follows: Punjab 2.124 million tons, Sindh 551,000 tons, Khyber-Pakhtunkhwa 227,000 tons and Balochistan 150,000 tons. Total domestic requirement is 3.052 million tons which indicates total gap of 307,000 tons.
The Ministry of Industries argues that an extra buffer stock of 200,000 tons was required to ensure that speculation and hoarding is not resorted to and urea remains affordable and available for the growers. Documents also showed that a meeting of all stakeholders, including manufacturers, provincial agriculture departments and federal ministries was convened on September 11 this year to review the urea situation for the next Rabi season. In the meeting, the Ministry of Petroleum & NR said that 4 out of 10 urea plants had been shut since June 19 this year and there was no hope of gas restoration in the near future. Despite having adequate installed capacity, the government had no choice but to import the fertiliser.
Representatives of urea manufacturers expressed reservations about the fertiliser stocks position for Rabi 2012-13 as recorded in the working paper. The representatives of the fertiliser maintained that opening inventories as well as off-take projection for the month of September 2012 was much higher than actual off-take. The September opening stocks were shared by manufacturers (figures in million tons) as FEC 129,000; Engro 100,000; Fatima 69,000; Agri tech 10,000; Total 315,000 tons).
Chief of National Fertiliser Development Cell, Planning Division gave his figures compiled on the monthly actual off take where record off-take had been experienced in June 2012 (twice the projected 500,000 tons). He said that the opening balance for September 2012 was 524,000 tons; manufacturers said that the total production would be 320,000 tons per month. As such, total urea availability was 744,000 tons for September this year. He said that September off-take would be 450,000 tons while the manufacturers felt that it would be 300,000 tons. At the start of the Rabi season in October this year, available stocks, including imported stocks, actually available with distributors would be 465,000 tons. Manufacturers felt that the total would be 615,000 tons.
The production of urea by manufacturers for the period October 1, 2012 to March 31, 2013 was given as 1.98 million tons (Mari-based and Bin Qasim plant and gas supply cut off to all SNGPL plants). As such, total urea available for Rabi was 0.465+1.98 = 2.445. After adding imported 300,000 tons in the pipeline the total came to 2.745 million tons.
The following demand of urea was specified by the provinces: Punjab: 2.124 million tons, Sindh: 551,000 tons; Khyber-Pakhtunkhwa 227,000 tons; Balochistan 150,000 tons; Total 3.052 million tons. The gap was identified as 3.052-2.745+ 0.307. Around 200,000 tons of buffer stock was also required to ensure that speculation and hoarding was not resorted to and urea remained affordable and available for the growers. As such the total gap was 0.5 million tons. Manufacturers assured that the price of 50-kg urea bag will not exceed Rs 1,659. The “sales tax and gas cess” and gas curtailment had led to urea price increase.