The Economic Coordination Committee (ECC) has decided to postpone the decision on importing 200,000 tons of urea until the final estimates of fertilizer requirements are shared for the current crop sowing season.
Sources have revealed that this matter was discussed in a recent ECC meeting. The committee has instructed the Ministry of Industries and Production to provide estimates on urea demand, supply, and the existing stocks in the country.
According to reports, Fauji Fertiliser Bin Qasim Limited (FFBL) has encountered a production loss of 22,000 tons due to gas pressure issues.
Urea Offtake Projection and Revised Estimates
During the meeting, it was disclosed that the Ministry of National Food Security and Research had initially projected an annual urea offtake of 6.508 million tons. However, the estimate was later revised due to a demand increase of 86,000 tons in March 2023.
In the event that both Sui Northern Gas Pipelines Limited (SNGPL)-based fertilizer plants shut down by May 31, 2023, the food ministry has projected an import requirement of 800,000 tons.
To assess the situation, the Fertiliser Review Committee convened on April 6, 2023, and endorsed the food ministry’s proposal to import 200,000 tons of urea by May 15, 2023.
The committee recommended that Fatima Fertiliser (Sheikhupura plant) and Agritech should receive uninterrupted gas supply beyond May 31, until December 2023.
Furthermore, it urged the Petroleum Division to ensure optimal urea production by all fertilizer plants by maintaining maximum gas pressure.
In accordance with the committee’s recommendations, the Ministry of Industries proposed that SNGPL-based plants, namely Fatima Fertiliser (Sheikhupura) and Agritech, be allowed to operate beyond May 31, 2023, until December 31, 2023.
The proposal suggested that the Trading Corporation of Pakistan (TCP) initiate the process for importing 200,000 tons of urea through a government-to-government (G2G) basis and an international tender.
Additionally, the Ministry of Commerce recommended that TCP be granted exemptions from certain rules to facilitate the G2G procurement and floating international tenders.
Published in PakWeb, June 3rd, 2023.
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