0.225 million tons of urea to be imported: $100 million Saudi credit facility to be utilised

The ongoing gas curtailment and load shedding to the fertiliser industry has led to a shortage 0.225 million tons of urea, which would have to be imported for the Rabbi season from Saudi Arabia by using $100 million export credit facility, official sources said.
Sources said that $200 million was pledged by Saudi Arabia during the Tokyo Donors Conference in April 2009 for export credit. Out of this amount, import of urea fertilisers from Saudi Arabia worth $100 million was made during 2009-10 and remaining $100 million would be utilised for this purpose because of urea shortage in the country due to gas load shedding to the industry.
The ECC was also informed that the earlier estimates of sufficient 'urea' production were based on the availability of gas, as was promised to the industry that gas curtailment to the fertiliser industry would end by July, 13, but later the date was extended to 31st October 2010. "The situation now emerging is that gas curtailment would continue and so would winter load shedding", an official who attended the ECC meeting said. The ECC, he said, was informed that the on-going load shedding would entail a shortage of 0.225 million tons of urea by the end of December 2010 and early January 2011, and would adversely affect the market sentiment even earlier.
The Ministry of Food and Agriculture held a number of meetings with the industry to ascertain available stocks of urea in the country and to work out the possible shortage of it for the next season. A summary based on calculation of the meeting with the industry was prepared and submitted in last meeting of Economic Co-ordination Committee of the Cabinet (ECC) for import of 0.225 million tons urea, critically needed to stabilise the market and to counter the possible increase in the price of the commodity, sources said.
The need for 0.225 million tons urea was critical to maintain adequate buffer stock for 'market stability otherwise speculation would lead to rise in urea prices in December 2010. In view of the prevailing situation of stocks and on-going gas cut to the industry, the meeting decided to place order for urea import to meeting the demand.
It was decided to import urea from Saudi Arabia Basic Industries Corporation (SABIC) by using financing facility of $100 million, pledged by Saudi Arabia during donors conference at Tokyo. The ECC also constituted a committee with the task to ensure timely import. Sources said that official of State Bank of Pakistan wanted to import urea through Trading Corporation of Pakistan because of involvement of subsidy.
The committee decided to import urea through private sector, for which it would be given Rs 6 billion subsidy.