The Pakistani government has approved the import of 100,000 metric tons of fertilizer at a price of $359 per ton. However, they have turned down a proposal to provide a subsidy of Rs 5.9 billion to match local urea prices.

This decision aims to address the fertilizer shortfall but could potentially disrupt market prices.

The Economic Coordination Committee (ECC) of the cabinet made this decision. Finance Minister Muhammad Aurangzeb chaired the ECC meeting.

The government stated that this decision is intended to ensure sufficient urea supplies in the market and maintain stability in fertilizer prices during the crop sowing season.

The Trading Corporation of Pakistan (TCP) issued a tender for the import of 150,000 tons of urea, which was opened on Monday. The TCP informed the ECC that six bids were received, with the lowest bid coming from West Trade International of the UAE.

The UAE-based company, West Trade International, offered a price of $359 per ton for the 150,000 ton urea import tender, which was the lowest among the six bids received. However, this price was quite high compared to the cost of earlier urea imports.

The Ministry of Industries informed the ECC that the landed price of the imported urea, including freight and handling charges, would be Rs 7,332 per 50kg bag. To match the local market price, the ministry sought a subsidy of Rs 2,932 per bag.

However, the Finance Secretary refused to provide any subsidy, stating that there were no budget allocations for it, and the government had not paid any subsidy on imported urea the previous year.

The Ministry of Industries had requested a total subsidy of Rs 5.9 billion to keep the imported urea prices aligned with the local market. Excluding the freight and handling costs, the imported urea price was Rs 5,832 per 50kg bag, as informed to the ECC.

The ECC also did not approve another proposal from the ministry to pursue government-to-government negotiations for finding cheaper sources of urea imports. It was informed that such negotiations with Malaysia and Azerbaijan had already been held, but the offers were higher than the competitive bidding process.

Negotiations with Turkmenistan for government-to-government urea purchases and efforts to get approval from China were ongoing.

The ECC was also told that the country may not need any further urea imports if the Punjab-based fertilizer manufacturers were supplied with imported gas. However, if the gas supply to these plants was disrupted during the Rabi sowing season, there could be a shortage of 351,000 tons.

The ECC directed the Ministry of Industries to find a solution to ensure constant fertilizer supplies to meet the cultivation requirements.

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