ISLAMABAD: Manufacturers on Friday urged the government to extend the deadline for fertiliser export from Oct 31 to Dec 31 and release subsidies announced in the budget 2015.
An official of Fertiliser Manufacturers of Pakistan (FMPAK) said the deadline to export 0.6 million tonnes of fertilisers is pretty close. However, the manufacturers are unlikely to meet the quota within the deadline due to various reasons including law and order situation and tense borders, the FMPAK representative added.
According to industry sources, between Jan to Sept only 335,000 tonnes fertiliser has been exported.
“A major chunk of exports are to India, Afghanistan and Central Asia but there is strict checking at the land routes,” the FMPAK official said.
“Certain kinds of fertilisers including potassium nitrate and potash are used to make IEDs (bombs) and the FC stopped all trucks going to Afghanistan. Later special security permits were issued to the fertiliser manufacturers,” he added.
Lack of required infrastructure at ports also delayed exports through sea, mainly to Sri Lanka and some East Asian nations, he added.
“The permission to export fertiliser was granted by the government in wake of highest ever inventory stocks of around 1.6m tonnes by the end of 2016,” said research analyst Ahson Ali.
“The production capacity has improved as manufacturers were getting uninterrupted gas supplies through LNG,” he added.
Due to higher production, the country has adequate fertiliser stocks and the industry is likely to have a ‘safety stock’ of around 500,000-600,000 tonnes by the end of 2017.
However, during the month of Sept, local urea sales were down 39 per cent compared to the same month last year. This was mainly due to excess buying in the month of August as farmers and traders were anticipating price increase.
The fears proved to be correct as fertiliser manufacturers increased urea prices by Rs60 to around Rs1,360 per bag in September.
The FMPAK official said the government had announced a subsidy of Rs100 per 50 kg bag in the 2015 budget. However, Rs20 billion is pending due to official interruptions which delayed the release of subsidies.