Fertiliser sales: DAP importers don’t agree with price reduction

Govt asked them to bring prices in line with fall in world market

ISLAMABAD: Fertiliser importers have turned down a government proposal to slash the price of di-ammonium phosphate (DAP) from Rs2,500 to Rs2,250 per 50kg bag to bring it in line with the international market rate, sources said.

The proposal was shot down at a meeting on Thursday at the Ministry of National Food Security and Research.

In the global market, the price has gone down since the fixing of the rate in Pakistan at Rs2,500 per bag through a government notification on June 25, 2016. Both the government and fertiliser companies had agreed on that price after including subsidy in the current year’s budget.

When the government issued the notification about four months ago, DAP was being sold for $355 per ton in the world market and now the price has dropped to $305, a decrease of $50. Fertiliser companies are selling the commodity at the notified price irrespective of the market rate. Keeping in view the price fall, the government is seeking to push it to Rs2,250 per bag.

According to sources, the provinces, particularly Punjab, have complained that importing companies are selling DAP at the higher price set about four months ago, which has hurt the centre’s plan to offer subsidised DAP to the farmers.

They suggested the federal government to issue a fresh notification and set the price at Rs2,250 per bag for the end-consumers.

However, sources said, the fertiliser companies did not agree with the proposal, claiming that market forces had already impacted the fertiliser prices and they were selling the commodity at lower rates. In this scenario, they emphasised, there was no need to issue an official notification for price revision.

Bowing to arguments of the companies, the government officials asked them to submit their rate lists in the next meeting, which would be held in the next 15 days. After that, the government will issue a fresh price notification.

Subsidy share

Participants of the meeting also discussed the contribution of provinces in fertiliser subsidy. It was noted that except for Punjab, no other province had released its due share so far.

Published in The Express Tribune, November 12^th, 2016.

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