Urea scam # 2186 | Pakistan Today

Urea scam # 2186

The Ministry of Industries has once again made a recipe to drain around $282 million in urea imports, which is hovering around $450 per ton in international markets. The ministry has proposed the government to import 600,000 tons of urea, whereas the National Fertiliser Development Centre (NDFC) believes that currently, there is no need to import fertiliser in the country.
The ‘NDFC Urea Outlook for Kharif 2012’ indicates that the kharif season is expected to begin with 0.851 million tons of opening inventory. Total available urea would be about 3.551 million tons, which will include 2.70 million tons of domestic production – subject to normal availability of gas to urea manufacturing plants. NDFC estimates that total urea off-take would be around 3.20 million tons leaving behind 351,000 tons of inventory for the next Rabi crop 2012-13.
Industry experts estimate that the C&F price of imported urea is around $470 per ton that means it would land in the country at Rs2,397 per 50 kg bag, inclusive of 12 per cent landed cost. They point out that if the government sell the imported urea at Rs1,600 per bag, it will have to bear an additional subsidy of approximately Rs12 billion.
They underscores that it will merely a wastage of foreign exchange and taxpayers money as it will never benefit farmers, only middlemen and profiteers will fill their pockets in connivance with state machinery. They pointed out that as much as 0.8 million tons of urea was carried forward from Rabi season to Kharif season that started from April 1. They further disclosed that four fertiliser plants on Mari Network are working at around 88 per cent of their capacity, while the SNGPL-based fertiliser plants are also operational since March 6, which means that country can produce the required amount of urea for domestic consumption without spending precious foreign exchange and also without giving away approximately Rs12 billion unnecessary subsidy. Fertiliser industry sources allege that the government is trying to import urea to take political advantage as it did in the Rabi season by distributing imported urea through hand-picked politically influential middlemen, as well as to make good amount of money for upcoming elections. They said that the whole strategy is being prepared on the pretext of benefiting farmers, but in fact small farmers would not even a single bag.
Industry leaders lament that despite the fact the Pakistan is the seventh largest urea producing country with manufacturing capacity of 6.9 million tons, the country had to spend $783 million on urea imports in 2011. In addition, the country had to pay Rs54 billion on account of fertiliser subsidy.
They term year 2011 as the worst year in the history of domestic urea industry as all manufacturing units could hardly produce 4.9 million tons of urea against the installed capacity of 6.9 million tons due to mismanagement in the energy sector and unannounced gas curtailment. The SNGPL-based fertiliser plants were badly hit as they could scarcely achieve 31 per cent of fertiliser production against their installed capacity, they maintained.
Despite urea imports and heavy subsidies urea consumption dropped significantly during the Rabi season 2011-12 (October-February. NDFC data shows that total fertiliser nutrient off-take during Rabi 2011-12 was about 1.596 million tons, which decreased by 18.9 per cent compared with same timeframe of previous Rabi season.



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4 Comments

  1. Azhar said:

    Its very interesting story given above. How government over come on all these situations, we shall see it in coming season of Kharief…let c where the prices goes either upto Rs 2000/ bags or decresed ….let cccccc

  2. Hafeez said:

    This is how the cartels work, they work inefficiantly to or produce lesser quantity to maintain a gap between supply and demand, so they can fleece the consumers with higher rates. And they governments try to bridge this gap, they cal foul.

  3. Hafeez said:

    Why didi't you publish my other comment on same matter. that was not derogatory by any means.

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