Govt likely to allow export of 0.8m tons of urea

ECC is expected to take up the matter for approval this week

ISLAMABAD: The government is expected to permit export of 800,000 tons of urea in line with a proposal of the Ministry of Industries because of surplus production in the country.

“The Economic Coordination Committee (ECC) of the cabinet may take up the export proposal in the current week,” a senior government official said.

Finance Minister Mohammad Ishaq Dar had chaired a meeting last week that reviewed the fertiliser stock position for the current crop-sowing season. He was briefed on the production and inventory levels and agreed in principle on urea exports because of surplus commodity in the country.



A senior official of the Ministry of Industries and Production told The Express Tribune that the industries ministry also recently held a meeting with fertiliser industry players and discussed the prevailing demand-supply dynamics as well as the outlook.

“The Ministry of Industries agreed in principle to allow export of 0.8 million tons of urea,” the official said.

According to the ministry’s estimates, 1.4 million tons of surplus urea will be available by the end of ongoing Rabi crop-sowing season at the end of March 2017. The government wants to keep a buffer stock of 0.6 million tons.

“A quantity of 0.8 million tons will be left for export after keeping the strategic reserves,” the official said, adding the shipment of the commodity overseas would help tackle oversupply in the domestic market.



In the meeting, the economic viability of exports also came up for discussion as export margins on current prices of $200 per ton were not attractive for the manufacturers. The average transportation cost for the industry amounts to $100 per ton for which the government may provide subsidy.

Published in The Express Tribune, October 25^th, 2016.

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