Asad Umar of Pakistan Tehreek-e-Insaf on Wednesday recommended that the government should import at least four ships of urea to bring down price of fertiliser as domestic fertilizer manufacturers are fleecing the poor farmers. Presiding over a meeting of National Assembly Standing Committee on Industries and Production, Umar, a former CEO of urea manufacturing plant M/s Engro, said that if he was given the finance portfolio for only two hours he would summon the domestic fertiliser industry and threaten them with flooding the market with urea imports unless they reduce their prices. If this option is given to them they would reduce prices within "two seconds", he averred.
He said domestic urea manufactures will earn Rs 30 billion profit this year from poor farmers as they are earning a Rs 250 per bag profit. He further maintained that NFML should flood the market as they can earn profit of Rs 250 per bag. However, the officials of Industries Ministry pointed out that flooding the market would be effective only if there is demand and added that the NFML cannot manipulate urea prices by even one rupee per bag without prior approval of the federal government.
Asad Umar, in a counter argument, said that there is a glut in the market because the price is as high as Rs 1900 per bag; had the price been Rs 1700 per bag demand would rise. "Given the higher urea price at which local industry is selling compared to import price the local manufacturers are earning an additional Rs 30 billion profit at the expense of farmers. The government is watching and doing nothing," he added.
Advocating the case of farmers, he said the price of paddy has dropped to half and a similar situation is being faced by cotton growers. He said if NFML sells four containers of urea at Rs 1500 per bag, prices will massively decline. Umar added that this decision cannot be taken either by the Industries Ministry or the Minister for National Food Security and Research, but by the Finance Minister or the Prime Minister. He was the view that there is no exposure in only four ships of imported urea.
"Nawaz Sharif is a decision-maker with a background in business. Somebody should put this agenda before him. Has anybody informed the Prime Minister about what is happening to the farmers. The government can pressurise fertiliser industry to bow down," he continued. The committee was informed that landed cost of urea in September 2015 was Rs 1490 per bag and total urea off take during Rabi 2015-16 shows a difference of 413,000 tons.
In October 2015, urea off-take was 197,000 tons against projected 400,000 tons whereas in November actual off-take was 623,000 against projected 500,000 tons. In December 2015, actual off take was recorded at 839,000 tons against projected 800,000 tons. In January and February 2016, actual off-take was 348,000 tons and 280,000 tons against projected 550,000 tons and 450,000 tons respectively. This implies a total off-take from October 2015 to February 2016 was 2,287,000 tons against projected 2,700,000 tons.
The committee deferred decision on Pakistan Machine Tool Factory (PMTF) as the management failed to satisfy the Chairman of the committee with respect to the "economic model" of the entity. The entity which supplied weapons to Sri Lanka during its fight against Tamil rebels is now suffering Rs 550 million losses per annum as Sri Lanka is no longer placing orders. The factory is now functioning 24 hours a day to meet orders from the Middle East because of financial woes. The management has requested the Standing committee's assistance in procuring a Rs 2 billion bailout package.
According to a press release also discussed recommendations on Public Sector Development Programme (PSDP) for the financial year 2016-17. Members National Assembly, Sardar Mansab Ali Dogar, Syed Muhammad Asghar, Qaiser Ahmad Sheikh, Sahibzada Muhammad Nazeer Sultan, Ms. Sajida Begum, Maulana Muhammad Gohar Shah, and Alhaj Shah Jee Gul Afridi, attended the meeting.
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