Deferred payment: government to import 0.255 million tons of urea from Saudi Arabia

Pakistan will import 0.255 million tons urea from Saudi Arabia by using the facility of deferred payment due to financial constraints, sources said. The decision was taken in the last meeting of Economic Co-ordination Committee (ECC) of the Cabinet on a summary moved by the Ministry of Industries and Production, sources added.
The ECC was requested to approve the import of the urea through Trading Corporation of Pakistan (TCP), however, a committee constituted by the ECC took the decision to involve private sector for which Rs 6 billion would be given to it as subsidy. The ECC was informed that the earlier estimates of sufficient ''urea'' production were based on the anticipation of an end to gas curtailment, which was announced till 31st July and then extended to 31st October 2010.
While the emerging situation shows that the gas curtailment would continue and so would the winter load shedding. The on-going load shedding would entail a shortage of 0.225 million tons of urea around end December 2010 and early January 2011 which will adversely affect the market sentiments even earlier.
The 0.225 million tons of urea was critical to maintain adequate buffer stocks for ''market stability'' otherwise speculation would lead to rise in urea prices in December 2010. The meeting was informed that price stability in Rabbi and Kharif seasons 2010 was due to adequate buffer stocks of urea.
The ECC was requested that in view of the prevailing situation of stocks and on-going gas cut to the industry, it is imperative to immediately place Urea import order otherwise it may be too late, if gas restoration was not made immediately. The meeting was apprised that urea would be imported from Saudi Arabia Basic Industries Corporation (SABIC).
The ECC meeting was also informed that a meeting was held under the Chairmanship of Minister for Industries & Production on the request of the fertiliser industry on November 11, 2010 to present their point of view on the prevalent gas cut.
The manufacturers also informed that the previous estimates of urea production during the current Rabi season were not correct since the calculations had not catered both cuts ie the routine winter gas load shedding and the continuation of the 20 percent gas curtailment. Earlier in the day a "Fertiliser Review Committee" meeting was held in MINFA wherein similar views were expressed.