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Pakistan to depend on local fertilizer to meet country’s demand

ISLAMABAD:- The Economic Coordination Committee (ECC) of the Cabinet has allowed to provide gas to fertilizer manufacturing plants to bridge shortfall of 0.3 million metric tonne urea fertilizer to meet the local requirement of Kharif Season 2023.

The ECC was held under the chairmanship of Finance Minister Ishaq Dar here on Wednesday on one point agenda.

Sources told the scribe that the Ministry of National Food Security and Research has presented a summary on Urea Fertilizer Requirement for Kharif 2023, The ministry told the meeting that demand for Urea fertilizer was estimated to be 3.2 Million MT, whereas production has been estimated to be around 2.9 Million MT for Kharif season 2023. The shortfall between demand and supply was estimated at 0.3 Million MT for the upcoming season.

In view of the shortfall between demand and supply, the Ministry of National Food Security recommended to the ECC to allow for providing gas from the Sui Northern Gas Company Limited to the fertilizer plants Fatima Fertilizer (Sheikhupura plant) and Agritech or to allow import of 300,000 MT of Urea fertilizer by May-2023.

The recommendations were agreed by all Provincial Agriculture Departments. The Ministry of National Food Security had already requested Ministry of Industries and Production for ensuring operations of SNGPL based plants for meeting demand of Urea fertilizer in the country.

In view of the position stated above, the Ministry of National Food Security has proposed to the ECC for directing the Petroleum Division to supply indigenous gas to both plants at SNGPL network immediately for bridging the gap between demand and supply of Urea fertilizer for Kharif season 2023.

The ministry has further said that the matter of gas pricing/allocation of indigenous gas to both plants on long term basis may be decided by the committee constituted by the ECC under chair of Mr. Shahid Khaqan Abbasi. Report of the same may be submitted to the ECC by the Petroleum Division.

According to the sources, the local urea demand for rabbi season was managed appropriately due to timely imports.

The officials from Punjab informed the federal government the urea fertilizer demand estimates were inclusive of 2.256 Million MT of Punjab. Further, he stated that due to multiple crop pattern being followed in Punjab, it was recommended that buffer stock limit needs to be increased to 300,000 MT. The Government of Sindh also agreed with the Urea fertilizer demand estimates.

The officials of the KPK also told federal government that the provincial demand for urea fertilizer for the upcoming Kharif season 2023 had been estimated to be 182,000 MT @ 35,000/month., While,  the officials of Baluchistan stated that the province has been supplied with 109,000 MT which was satisfactory. They informed that they were still working on estimates for Urea demand for upcoming Kharif season 2023, which would be shared in due course.

The representative from FFC and Engro agreed with the Urea off take estimates and stated that if the SNGPL plants were not operated then import of at least 250,000 MT would be required for meeting demand during Kharif season 2023. However, if plants were operated then demand could be met.

The representative from Fatima Fertilizer communicated to the federal government that the production capacity was available for meeting the subject shortfall. If Government decided to allocate gas to both fertilizer plants then forex on import/subsidy could be saved.

On the basis of the recommendations of the stakeholders and prevailing foreign reserves of the country, the ECC has set aside the option of the import of urea fertilizer and allow to provide gas supply to both the manufacturing plants to produce 0.3 million urea fertilizer for Kharif season.

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