ISLAMABAD, Jan 7: Anticipating continuous fertilizer shortages in the next few years, the federal government has decided to chalk out a long-term urea-import plan to maintain a steady growth in agriculture sector.

Official sources told Dawn on Friday that Economic Coordination Committee (ECC) of the cabinet was informed recently that domestic production of urea in the coming years could not meet the requirement.

The Prime Minister, said these sources, directed the ministry of food, agriculture and livestock (Minfal) to assess the production and shortage scenario of the commodity and make timely arrangements in this regard to import urea through Trading Corporation of Pakistan (TCP).

A senior government official quoted the prime minister as saying that "fertilizer import requirements may be assessed in time by the Minfal, and TCP may be asked to strike a good bargain at appropriate time."

The sources said two fertilizer plants, which are currently in the pipeline, would significantly contribute to the local fertilizer production but they would take at least two years to start production. The projects include an expansion plan of Fauji Fertilizer and a green field project of a private company. The requirement would, however, keep on increasing.

The TCP had imported about 250,000 tons of urea early this season at a loss of more than Rs700 per 40 kg but the domestic requirement during the current Rabi season kept on increasing and resulted in significant price hike, notwithstanding the subsidy picked up by the federal government.

The TCP has already demanded over Rs12 billion from the federal government for commodity trade which has been playing a crucial role in lifting cotton from the farmers, importing 1.5 million tons of wheat and import of urea.

The recent meeting of the ECC was told that domestic fertilizer prices showed mixed trend as Nitrophosphate and urea prices increased by 0.52 per cent and 0.35 per cent respectively in just one week while prices of DAP and SAP reduced by 0.43 per cent and 0.41 per cent respectively.

Owing to rising prices in the domestic market, the federal government had recently banned export of all kinds of fertilizers to any country but had exempted the United Nations agencies to export the commodity if they so required.

The market sources, however, said the import of fertilizers and ban on its export could not control rising urea prices which have gone up to Rs490-500 per 40-kg against the official rate of Rs450.

The authorities are at a loss as to why the prices were increasing even after November and December when normally these should start reducing owing to comparatively less consumption.

The prices, which were Rs425-450 at the start of the season when the consumption is normally higher but have now gone up to Rs500 per maund. During the current season, domestic production had amounted to about 4.4 million tons against an estimated consumption of 4.7 million tons.

The sources said the TCP had imported around 170,000 tons of fertilizer so far and another shipment of around 30,000 tons was expected to arrive from Saudi Arabia by mid of this month.