ISLAMABAD: Minister for Planning, Development and Special Initiatives, Asad Umar has hinted at urea shortage in the country in winter, which may cause price escalation in future, well informed sources told Business Recorder.
He shared his observation during a recent meeting of Economic Coordination Committee (ECC) of the Cabinet when a summary of “urea fertilizer requirement for Rabi season 2021” came under discussion.
Ministry of Industries and Production (MoI&P) in its summary recommended that ECC may allow operations of Fatima Fertilizer (Sheikhupura plant, and Agritech) for a further period of two months i.e. December, 2021-January, 2022 and may direct Petroleum Division for immediate supply of gas to the two northern urea plants.
The MoI&P also recommended that in order to meet the demand for Urea fertilizer during Rabi season 2021-22, import of 200,000 MT may be allowed.
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During the ensuing discussion, Minister for Energy agreed to provide the requisite gas to the plants after four days. Minister for Planning & Development commented that in addition to supply of gas to the plants, stock position of urea after January 2022 may also be ascertained. He stated that there might be shortages in winter months, even after the supply of gas to the plants, which may cause price escalation in future. He further added that some buffer stocks must be built in to ensure supply in case of unexpected break down of any gas field.
The Ministry of Industries and Production agreed to hold meeting with the Industry to see the possibility of increase in production capacity of plants and furthermore, options of import, if needed.
Minister for National Food Security and Research, Syed Fakhar Imam invited attention of the house on the availability of urea and DAP during the coming season. Minister for Finance and Revenue, Shaukat Tarin stressed the need of proper evaluation of demand and supply and possibility of import to ensure price and supply stability.
After detailed discussion, the ECC allowed operation of Fatima Fertilizer (Sheikhupura plant) and Agritech for a further period of two months i.e. December, 2021 - January, 2022 with direction to Petroleum Division to supply requisite gas to said fertilizer plants for above period. The Ministry of industries and Production was directed to make an assessment of demand and supply of the Urea and DAP fertilizers, in consultation with Deputy Chairman Planning Commission, and submit proposals/ recommendations to the ECC within two weeks.
Rabi season: urea fertilizer demand comes under the spotlight
In this regard an inter-ministerial meeting was held on Friday wherein recommendations have been finalised for the forthcoming ECC.
During the meeting industry was of the view that Rabi off take is projected to be around 3.1 MT, while NFDC presented exaggerated numbers of Dec offtake reaching 1025 against industry estimate of 925.
Industry is of the view for sustained gas supply to RLNG plants beyond January 22 to ensure required volume of urea. Moreover, FFBL gas supply was also recommended to be sustained to ensure production of 100,000 MT of urea besides DAP. Government has made an offer of RLNG to FFBL in response to plant’s request for sustained supply of gas to ensure urea availability on the terms it is being supplied to Agritech and Fatimafert. The proposal to be evaluated by FFBL.
Copyright Business Recorder, 2021
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