ECC allows import of 150,000 tons of urea

TCP will float tenders as chance to take Saudi credit facility lost

ISLAMABAD: After losing an opportunity to reap benefits of a Saudi Arabian credit facility, the government has allowed the Trading Corporation of Pakistan (TCP) to purchase 150,000 tons of urea by floating international tenders to bridge the demand-supply gap in the Kharif sowing season.

In a meeting held on September 3, the Economic Coordination Committee (ECC) of the cabinet granted ex-post facto approval for the import of 150,000 tons of urea by the TCP.

However, Petroleum and Natural Resources Minister Shahid Khaqan Abbasi opposed the move, stressing that urea import should be discouraged as the country’s manufacturers had the potential to step up production of the commodity.



However, the major challenge for domestic fertiliser plants has been the scarcity of gas and liquefied natural gas (LNG) imports could be an option to meet their fuel needs.

Read: Rabi season 2015: TCP urged to import 150,000 tons of urea

The ECC chairman endorsed the proposal and asked the petroleum minister to come up with details in the next meeting. The Ministry of Industries and Production recalled that the ECC had, on April 23 this year, approved import of 250,000 tons of urea for the 2015 Kharif season to meet the shortfall.

Of this, the TCP had to import 100,000 tons through international tenders and for the remaining quantity the Economic Affairs Division and the Finance Division had to identify the best possible credit line.

Keeping in view the decision, the TCP imported the required 100,000 tons whereas the Economic Affairs Division and the Finance Division were asked at the end of May to bring 150,000 tons with the help of Saudi Arabian credit facility.

At least three months were required for finalising an agreement with the Saudi Fund to get the credit facility for fertiliser import.

The Ministry of Industries suggested that the Saudi credit facility could now be utilised to satisfy urea demand for the 2015 Rabi season starting in October. In an effort to avoid shortage in the domestic market, it said, the TCP had been requested to make necessary arrangements for the import of 150,000 tons through international tenders, which were under process.

Read: Urea demand: Ministry proposes import of 350k tons to meet shortfall

The ECC was told that the finance minister had granted anticipatory approval for the fertiliser import. The Ministry of Industries asked the ECC to give ex-post facto approval to the TCP for importing 150,000 tons of urea. After deliberations, the ECC gave the go-ahead.

Published in The Express Tribune, September 10^th,  2015.

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