Serious urea shortage crisis feared

The Ministry of Industries and Production (MoI&P) fears a serious urea fertiliser crisis across the country after the government's fertiliser import plan fails to materialise, sources told Business Recorder. "We are foreseeing a serious urea crisis in the country because the stock with the local manufacturers is about 24,000 tons only, and no import is expected in the near future," sources said.
An inter-ministerial meeting held on December 3, 2011, co-chaired by Minister for Industries and Production Hazar Khan Bijarani and Minister for Food and Agriculture (Minfa), held the Ministry of Water and Power responsible for the crisis as it allegedly failed to submit a summary regarding providing Mari gas to the fertiliser plant.
Sources said that the Ministers of Minfa and Industries expressed their concern to the officials of Ministry of Water and Power present in the meeting. The Minister for Industries directed Secretary Industries to finalise the summary and send it to the Prime Minister immediately. Minfa Minister, sources said, urged the Joint Secretary, sitting in the meeting, to include the exchange of harsh words in the summary so that the concerned Ministries must be held responsible for the fertiliser crisis.
According to sources, the government's plan to import 0.225 million tons urea through SABIC/Saudi Fund for development on deferred payment has been scrapped as SABIC has refused to extend the facility to Pakistan. Besides, local fertiliser manufacturers have refused to import fertiliser. "TCP Chairman Anjum Bashir intimated to the Ministers that Saudi Arabia was unwilling to extend this facility for supply of urea," sources added.
Representatives of the fertiliser sector clarified that the price increase was due to the 45 days' winter gas load shedding, instead of 30 days, gas curtailment of 20 percent on Sui-based plants and 12 percent gas curtailment on Mari-based plants since May 2010. They assured that if gas was restored they would take the price increase back. The meeting looked into the different possibilities of improving gas supply to the fertiliser industry.
It was also decided in the meeting that import of 0.225 million tons of urea would be fast-tracked to ensure availability of urea in the market, at reasonable price. The price of urea in the international market was $376 fob, that translated into around Rs 2012 per 50 kg bag. The offtake of urea during last two months has been more than normal which has given a signal to hoarders. The provincial governments were directed to take appropriate legal action against hoarders.
Meanwhile, Fertiliser Price Review Committee (FPRC) has recommended to Prime Minister that gas load management may be curtailed to 30 days instead of 45 days as per practice of previous years. Further, decision of gas diversion to fertiliser manufacturing companies from Mari Gas Station, already taken by the FPRC and ECC as well, may be implemented immediately.
Under the directives of the Chairman of FPRC Mir Hazar Khan Bijarani, a summary has been sent to Prime Minister for approval. With the approval and implementation on both recommendations, about 0.2 million tons of urea would be produced locally within 15 days.
Moreover, a two-member team comprising Federal Secretary Industries and Federal Secretary Food has been tasked to negotiate summarily with the concerned Saudi authorities for immediate import of 0.225 million tons urea through SABIC facility. The delegation is going to negotiate with them in a day or two.
The meeting was attended by the Minister for Food and Agriculture, Minister for Agriculture Punjab, Secretary Agriculture Sindh, Senior officers from Finance, Minfa, Petroleum and Natural Resources and Ministry of Water and Power, Planning Commission, NFC and the fertiliser manufacturers.