Private manufacturers contracted for imported urea sale

LAHORE: The government of Pakistan has finalised an agreement with the private manufacturers of fertilizers for the sale of 220,000 metric tons of urea fertilizer worth $100 million imported from Azerbaijan.

Sources said that agreements had been signed between Pakistan government’s National Fertilizers Marketing Limited (NFML) and private manufacturers, Fuji Fertilizers, Engro, Fatima Group and Agritech. According to the agreements, 45% of the imported 220,000 metric tons of urea fertilizer will be sold by Fuji Fertilizers, 25% by Engro, 25% by Fatima Fertilizers and 5% by Agritech.

Sources said that because of a ban on subsidizing imported urea by the IMF and non-removal of subsidy by the provinces, contracts had been signed to sell urea fertilizer through private manufacturers. Sources said that the Economic Coordination Council (ECC) gave permission for the agreements, which were later approved by the federal cabinet, to import 220,000 metric tons of urea fertilizer worth $100 million from Azerbaijan to be sold by private manufacturers.

Sources said that according to the agreements, all expenses including the loan taken by the government of Pakistan for the import of urea, interest on it, transportation and handling costs will be paid by the fertilizer companies.

The agreements also stipulate that the private manufacturing companies will carry out basket pricing whereby the price of imported urea and local manufacturing will be combined to determine a single price for sale.

Sources said that as per the agreements, all the process will be completed within ninety days and the private manufacturers will collect urea from the warehouses of National Fertilizers Marketing Limited at their own expense and deliver it to farmers through their dealership network.

After the completion of all this process, the shortage of urea in the country will end. Sources said that the price of urea per sack will increase by Rs200 through private distribution of fertilizer while the price of locally produced urea will also be equal to it. Sources said that each manufacturer will determine the price itself, but a bag of urea will be available to farmers for Rs3,800 to Rs4,000.