The Ministry of Food and Agriculture (Minfa) has decided to request the Ministry of Finance for $100 million, in addition to $200 million, for purchase of urea, sources told Business Recorder on Saturday. They said that the Finance Ministry had already provided $200 million for purchase of urea during Rabi season, but to avoid shortage of the commodity in kharif, the government wants to have sufficient stocks.
The government is trying to build sufficient urea stocks for Kharif. The Trading Corporation of Pakistan (TCP) has already opened tender to import 0.7 million tons urea. Out of this 0.7 million tons urea, 0.4 million tons has already arrived, and the rest would be imported soon.
They said that in the 2008-09 budget, the government had decided to heavily subsidise the fertiliser and make it available to the farmers at affordable rates. During 2007-08 the bill of subsidy was Rs 29.5 billion. So, for the current fiscal year an amount of Rs 35 billion was kept to subsidise urea, phosphatic and pottasic fertilisers.
"No doubt, late import of urea has created many problems for the wheat growers because the commodity was being sold at the outlets at Rs 950-1000 per 50 kg bag that was beyond the purchasing power of the poor farmers", sources said.
They said that delay in opening LCs for import led to shortage of urea in the local market. They said that prior to the International Monetary Fund (IMF) loan of $7.6 billion, the country was suffering financial crunch that led to delay in the opening of LCs and import of urea. Use of urea in most of the parts of the world, especially in India, China and Pakistan, has increased considerably.
Sources said that delay in announcement of a fertiliser policy and installation of additional fertiliser plants were the main reasons for not achieving self-sufficiency in fertiliser production.