Go-ahead: Ministry to frame policy for urea import by private sector

Imports will bridge shortfall, save gas consumption in local production

ISLAMABAD: The Finance Division and the Ministry of Petroleum have given the go-ahead to the Ministry of National Food Security and Research for framing a policy that will allow urea import by the private sector.

The permission came after the food security ministry sent a proposal seeking comments for clearing the way for the private sector to make urea import.

“Both the Finance Division and the petroleum ministry have endorsed our proposal,” said a senior officer of the food security ministry.

He said the ministry would now place a summary before the Economic Coordination Committee, which had earlier given directives for seeking comments from the quarters concerned, for a final decision.

According to the officer, the petroleum ministry, in its response, was of the opinion that domestic manufacturers produced urea at a high cost despite receiving a huge quantity of gas, which could be saved if the private sector imported cheap urea from overseas markets.

Similarly, the Finance Division thought that it would prove economical if the private sector imported the fertiliser compared to its production at a high cost in the country. It would also bridge the demand-supply gap and spark healthy competition, it said.

However, according to sources, fertiliser manufacturers are putting up a strong resistance to the proposal, which will definitely break their monopoly.

Under the existing policy, urea is manufactured locally or is imported only by the state-owned Trading Corporation of Pakistan (TCP) if the need arises. The private sector has no role in imports.

National Food Security and Research Minister Sikandar Hayat Khan Bosan points out that farmers were not only receiving less-than-required quantity of locally produced fertiliser but were also forced to pay high prices.

He believes there is no harm in urea import by the private sector as it already buys di-ammonium phosphate (DAP) - another type of fertiliser - from the international market.

At present, the country needs 6 million tons of urea annually, but local manufacturers produce 4.5 million tons and the remaining 1.5 million tons are supposed to be imported by the TCP.

In the domestic market, a 50kg urea bag is available at Rs1,900 compared to Rs1,500 in the world market.

Published in The Express Tribune, March 5^th, 2016.

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