The government imported 435,000 tons of urea so far in 2013 at $140 million. Fertiliser industry maintains that no fresh imports are required for rest of the year 2013. About 300 Kt import was approved by the ECC for Kharif - all tendered but partial arrival yet, and 110 Kt through grants is also in the pipeline for running year. Pakistan would have to spend approximately Rs 360 billion annually on account of urea import if government decides to close down fertiliser industry by permanently disconnecting gas to 7 Fertilizer Plants with annual production capacity of 6.9 million tons. The cost of importing 6.0 million tons of urea for the country would be approx Rs 312 billion and if government decides to subsidise this imported urea, as is the practice with imported urea, it would need additional Rs 140 billion to match the prevailing urea prices. The domestic fertiliser industry’s urea price is $ 340 per ton whereas the imported CFR price inclusive of handling, inland freight charges and sales tax is $ 454 per ton. The urea price includes GST of approx $ 50 per ton. If this amount is excluded, the domestic fertiliser price will come down to $ 290 per ton. International price of urea is currently at its lowest ebb, and if an 18-36 month moving average is considered in which Pakistan imported over 3.1 million tons of urea by draining approximately $ 1.5 billion which was paid over Rs 80 billion subsidy, the differential between local and international prices is more than Rs 1,000 per bag.
Posted on: Thu, 19 Sep 2013 10:41:56 +0000
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