Surplus stock

Since it is imperative for Pakistan to improve its balance of trade to stabilise its economy, it must give requisite incentives to the industrial sector to boost exports. In this regard, the government must allow the export of surplus fertilizers. This can be a quick and sustainable solution to reduce trade deficit and earn valuable foreign-exchange. Pakistan’s domestic fertilizer manufacturers have achieved very high productivity over the past couple of years. While fulfilling the local demand of the country’s agricultural sector, they had accumulated a big surplus opening inventory of nearly 1.5 million tonnes of urea in 2017.

This surplus inventory could be easily exported without creating any shortage of urea within the country. This is because all enterprises – including RLNG-based factories – are willing to continue their production if they are provided with sufficient gas and a favourable working environment. The management of a large inventory involves huge carrying cost and storage expenses. This is why this year the government’s Economic Coordination Committee (ECC) allowed the export of 300,000 tonnes of urea to reduce this inventory burden. However, the authorities have given a short period of time for the export. After October 31, the export of surplus stock will not be allowed. The government has to look into the matter. It should take a decision that will be beneficial for the country’s economy.

Ammar Muzaffar (Karachi)