Farmers suffering.

Byline: Shabbir Kazmi

A tug of war has been going on between the elements adamant at importing urea and its local manufacturers. With regular intervals the need for importing urea is raised, whereas the industry experts have a contrary view. There prevails a consensus among urea manufactures that they are capable of exporting up to one million tons urea per annum, if the right impetuses are provided: uninterrupted gas supply and control over smuggling of urea to the neighboring countries.

It may be recalled that lately Imran Ahmed, CFO, Engro Fertilizers in an interview highlighted that local urea manufactures have an aggregate installed capacity of 7 million tons, whereas they produce around 6 million tons due to subdued indigenous demand. He also highlighted that Pakistan can export up to one million tons urea per annum, if required quantity of gas is supplied. However, soon after publication of his interview there was uproar of the shortage, black marketing and hording. This provided an opportunity to the group having vested interest to ask the government to import 100,000 tons urea on urgent basis.

In one the recent meeting the Economic Coordination Committee (ECC) of the cabinet, presided over by Minister for Finance and Revenue Shaukat Tarin approved import of 50,000 tons urea from China on an immediate basis subject to clearance from the Pakistan Standards and Quality Control Authority. The meeting allowed import of urea on a government to government basis and tasked the Trading Corporation of Pakistan with negotiating the price with a Chinese supplier authorized by the Government of China for further import of urea.

Fertilizer Manufacturers of Pakistan Advisory Council (FMPAC) had suggested to the government to import 100,000 tons urea to build the buffer stock. "This decision will help end psychological pressure on the farmers regarding the urea shortage," said FMPAC Executive Director Retired Brig Sher Shah Malik. He said that currently the fertilizer industry was selling around 20,000 tons urea per day and the imported stock of 50,000 tons could last only less than three days. He said the urea industry thought that there had to be some buffer stock in the country.

Earlier, a Parliamentary Committee had noted that the gas supply disruption to fertilizer plants during the June-September period had caused a shortage of 200,000 tons urea. Discussing the urea shortage, the Senate Standing Committee on National Food Security and...