ECC meeting: Fertiliser prices likely to rise on urea shortage
Top economic decision-making body decides to import rather than restoring gas supply.
ISLAMABAD:
The government has failed to build consensus on immediate restoration of gas supply to the fertiliser sector, which is likely to lead to an increase in urea prices and adversely affect the agriculture sector.
The Economic Coordination Committee (ECC) of the cabinet for the third consecutive time on Tuesday remained unable to take a decision on a summary of the Ministry of Industries and Production, seeking restoration of gas supply for 30 days in order to meet urea requirements for Rabi crops.
The ECC, the highest economic decision-making body headed by Finance Minister Dr Abdul Hafeez Shaikh, instead decided to meet the needs through import of 225,000 tons of urea by issuing tenders. The import is expected to cost Rs4.5 billion to the national kitty as the government provides the important agriculture input to farmers on subsidised rates. However, officials of the food and agriculture ministry expressed doubts over timely import.
In a meeting held on December 7, the ECC decided to import 225,000 tons of urea from Saudi Arabia Basic Industries (SABI) to meet an anticipated shortfall in the Rabi season. Official sources told The Express Tribune that the import plan has been delayed due to an anti-dumping inquiry being conducted by the National Tariff Commission against the Saudi firm.
The National Tariff Commission is probing the export of 50,000 tons of caustic soda by SABI to Pakistan. The government wanted to import the urea by using a $100 million commercial loan extended by the Saudi government at the Friends of Democratic Pakistan forum.
According to the industries ministry, if the urea shortfall was not bridged it would not only hurt production of Rabi crops but will push up prices as well.
“A 30-day gas supply will not only help produce 225,000 tons of urea but will also reduce prices by Rs190 per 50kg bag,” said official documents.
Federal Minister for Food and Agriculture Nazar Mohammad Gondal has emphasised the need of meeting urea requirements for the Rabi crops. “Prices are escalating in the open market due to the shortages and if the demand is not met before the sowing of crops, it will have negative effects on the overall agriculture production and economy,” he added.
Trading Corporation of Pakistan (TCP) Chairman Anjum Bashir told the ECC that the TCP would float a tender for the supply of 100,000 tons of urea from the open market on March 7.
The ECC also waived taxes and duties on import of solar panels in order to promote the use of renewable energy.
The government allowed Swede Bus Company Limited to sell 32 imported buses without paying customs duties. The company had imported Scania buses with Euro-II engines in 2003 for plying in Karachi under the Prime Minister’s Urban Transport Strategy Plan of 1999.
The committee also approved allocation of 7-10 million cubic feet of gas for the Quetta Thermal Power Station.
Published in The Express Tribune, February 2nd, 2011.
The government has failed to build consensus on immediate restoration of gas supply to the fertiliser sector, which is likely to lead to an increase in urea prices and adversely affect the agriculture sector.
The Economic Coordination Committee (ECC) of the cabinet for the third consecutive time on Tuesday remained unable to take a decision on a summary of the Ministry of Industries and Production, seeking restoration of gas supply for 30 days in order to meet urea requirements for Rabi crops.
The ECC, the highest economic decision-making body headed by Finance Minister Dr Abdul Hafeez Shaikh, instead decided to meet the needs through import of 225,000 tons of urea by issuing tenders. The import is expected to cost Rs4.5 billion to the national kitty as the government provides the important agriculture input to farmers on subsidised rates. However, officials of the food and agriculture ministry expressed doubts over timely import.
In a meeting held on December 7, the ECC decided to import 225,000 tons of urea from Saudi Arabia Basic Industries (SABI) to meet an anticipated shortfall in the Rabi season. Official sources told The Express Tribune that the import plan has been delayed due to an anti-dumping inquiry being conducted by the National Tariff Commission against the Saudi firm.
The National Tariff Commission is probing the export of 50,000 tons of caustic soda by SABI to Pakistan. The government wanted to import the urea by using a $100 million commercial loan extended by the Saudi government at the Friends of Democratic Pakistan forum.
According to the industries ministry, if the urea shortfall was not bridged it would not only hurt production of Rabi crops but will push up prices as well.
“A 30-day gas supply will not only help produce 225,000 tons of urea but will also reduce prices by Rs190 per 50kg bag,” said official documents.
Federal Minister for Food and Agriculture Nazar Mohammad Gondal has emphasised the need of meeting urea requirements for the Rabi crops. “Prices are escalating in the open market due to the shortages and if the demand is not met before the sowing of crops, it will have negative effects on the overall agriculture production and economy,” he added.
Trading Corporation of Pakistan (TCP) Chairman Anjum Bashir told the ECC that the TCP would float a tender for the supply of 100,000 tons of urea from the open market on March 7.
The ECC also waived taxes and duties on import of solar panels in order to promote the use of renewable energy.
The government allowed Swede Bus Company Limited to sell 32 imported buses without paying customs duties. The company had imported Scania buses with Euro-II engines in 2003 for plying in Karachi under the Prime Minister’s Urban Transport Strategy Plan of 1999.
The committee also approved allocation of 7-10 million cubic feet of gas for the Quetta Thermal Power Station.
Published in The Express Tribune, February 2nd, 2011.