The Ministry of Industries and Production has reportedly withdrawn its proposal of fixing imported urea selling price at Rs 50 per bag less than the domestic urea on pressure of local fertilizer industry, well-informed sources told Business Recorder.
The decision, sources said, was taken at a meeting between the local fertilizer industry and Ministry of Industries and Production's team headed by Prime Minister's Advisor on Commerce, Textile, Industries and Production and Investment, Abdul Razzak Dawood. The meeting agreed to fix the price of imported urea at Rs 1712 per bag. The meeting, however, warned domestic fertilizer industry to release its stocks to the market so that farmers can get urea at fixed price. On December 12, 2018, Economic Coordination Committee (ECC) of the Cabinet, in view of the anticipated shortage of urea for the upcoming Rabi season, directed Trading Corporation of Pakistan (TCP) to import 100,000 MT of urea in its decision of September 10, 2018. TCP has reported that cost per 50 kg bag excluding NFML charges stands at Rs 2,555 per bag.
Pakistan Bureau of Statistics (PBS) has reported that price of 50 kg Sona urea for the week ending on December 6, 2018 was Rs 1771 whereas price of other urea was Rs 1747. NFML had suggested that dealer booking price of imported urea be kept at least Rs 100-150 lower per bag than local urea brand price. Detailed working of the subsidy impact to be borne by GoP with existing NFML handling charge rate of Rs 21/bag proposed an increase of Rs 70/bag by NFML.
Keeping in view the domestic urea prices, Ministry of Industries and Production had proposed that selling price of imported urea bag be fixed at Rs 50 less than the prevailing market price of local urea i.e. Rs 1697/50 kg bag.
On December 12, 2018, Industries and Production Division updated the meeting about urea supply situation in the country. It was stated that the ECC allowed import of 150,000 tons of urea to meet its requirement for Rabi crop. Accordingly, first vessel carrying 50,600 tons of imported urea arrived on December 2, 2018 whereas second vessel carrying 54,500 tons urea has also arrived. Tenders for third consignment will be opened on January 4, 2018.
The meeting was informed that price of urea has gone upward during last one week due to shortage of urea. Currently, urea is being sold to consumers at Rs 1850 per bag.
The ECC had expressed its concern over non- fixing of price of imported urea and observed that it was the responsibility of concerned Ministry/ Division to get approval of the competent forum/ authority for fixing the market price of imported urea well ahead of its import.
On December 17, 2018, fertilizer industry's representatives held a meeting with Advisor to PM a few hours before the ECC meeting. Supply demand situation was reviewed and Chair expressed his satisfaction. It was explained to him that Dealer Transfer Price (DTP) was Rs 1712 and the undue price rise is not due to shortage. It was attributed to speculation due to withholding of imported stocks and news of gas shortage.
On the fertilizer industry's recommendation, the Advisor indicated the DTP for imported urea be at par with domestic urea. He also reiterated the assurance to continue operation of SNGPL based plants. The industry pledged to support government efforts to ensure price stability through cooperative measures instead of crackdowns and strict measures. The Advisor directed Joint Secretary to advise the provincial governments to avoid crackdowns, informing them of satisfactory supply state and expected all stakeholders to show responsible attitude.
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