State-run marketing firm eager to import urea to meet demand

Industries secretary denies any shortage of fertiliser in country.

ISLAMABAD: National Fertiliser Marketing Limited (NFML), a subsidiary of the Ministry of Industries and Production, has sought the go-ahead for direct import of urea to meet the demand of agriculture sector.

“We should be allowed import of urea and di-ammonium phosphate on the model of Utility Stores Corporation, which has been given the green signal to purchase sugar from domestic mills,” Waseem Mukhtar, Managing Director of NFML, said.

He was speaking during a briefing to the sub-committee of the National Assembly Standing Committee on Industries and Production, which met here on Tuesday with Mian Abdul Manan in the chair.



Mukhtar, who won the backing of Industries and Production Secretary Raja Hasan Abbas for direct urea purchase, told the committee that the country needed to import 600,000 tons of urea in the current Rabi sowing season. Of this, 400,000 tons were being imported by the Trading Corporation of Pakistan (TCP) whereas 185,000 tons would be brought from Saudi Arabia.

In the season, total urea demand is estimated at 3.086 million tons in which Punjab’s share is 2.132 million tons (69%), Sindh 550,000 tons (18%), Khyber-Pakhtunkhwa 254,000 tons (8%) and Balochistan 150,000 tons (5%).

The TCP had already floated tenders for urea import and the first tender was awarded at $318 per ton. This urea, which will come from China, is expected to reach in three weeks.

Another consignment of 185,000 tons will arrive in December whereas 100,000 tons are in the stocks of NFML. This shows that 700,000 tons will be available in the Rabi season.



Industries and Production Secretary Raja Hasan Abbas stressed that there was no shortage of urea as the private sector would produce 2.4 million tons. If gas supply was stepped up, the fertiliser plants could churn out more, he said.

According to Abbas, Pakarab Fertilisers and Dawood Hercules, which are linked with the network of Sui Northern Gas Pipelines Limited (SNGPL), are being supplied gas for 15 days in a month on a rotation basis. Dawood Hercules will produce 15,000 tons of urea.

He declared that the government would make all-out efforts to ensure that urea was sold at a fixed price by the private sector at Rs1,786 per bag excluding Rs40 to Rs50 in dealer commission.

Committee members also took up the issues being faced by the USC as its sales had come down Rs10 billion in just four months of the current fiscal year. Unavailability of sugar at subsidised rates has been blamed for the decline in sales.

Sales of sugar at utility stores were recorded at about Rs1.5 billion per month, but since the government allowed them to buy sugar directly from the mills, there had been no purchases.

“Three sugar mills quoted a price of Rs60 per kg despite the fact that ex-factory price was Rs52 per kg,” said Sultan Mehmood, Senior General Manager of USC.

The committee chairman directed the USC to blacklist these mills and proposed that the Ministry of Industries should arrange a meeting between sugar millers and USC officials to help them agree on a purchase mechanism.

Published in The Express Tribune, November 12^th, 2014.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.