ISLAMABAD, Oct 6: To meet 0.307 million tons of urea shortfall for Rabi season 2012-13 starting from the end of current month, the government has decided to import 0.2 million tons of urea fertiliser under Saudi Arabia’s credit facility to avoid pressure on its foreign exchange reserves.

Total requirement of urea is estimated at 3.052 million tons and local availability is estimated at 2.745 million tons, leaving a shortfall of 0.307 million tons for Rabi Crop 2012-13, which starting from Oct 31, will continue up to the end of March, 2013.

The decision was taken in the meeting of Economic Coordination Committee (ECC) of the Cabinet held recently here in the federal capital. However, a committee has also been constituted by the ECC to determine the distribution mechanism so that price relief can be forwarded to farmers.

The credit facility for urea has been extended by the Saudi Basic Industries Corporation, SABIC, one of the world’s leading manufacturers of chemicals, fertilisers, plastics and metals.

To avoid pressure on dollar reserves in the country, the ECC rejected the proposal by Ministry of Industries to import 0.5 million tons of urea fertiliser through the Trading Corporation of Pakistan (TCP) in open tenders mechanism, official sources said.

The ministry had sought import of urea through the TCP to meet a demand and availability gap of 0.307 million tons and 0.2 million tons for maintaining buffer stock of urea fertiliser in the country, sources explained.

According to a summery submitted to the Economic Coordination Committee (ECC) of the Cabinet, to access the fertiliser demand and supply for Rabbi Crop 2012-13, a meeting of all stakeholders, including manufacturers, provincial agriculture departments and federal ministries, was convened last month to review urea situation for Rabi Crop 2012-13.

The Ministry of Petroleum and Natural Resources informed the meeting that four, out of 10 urea plants, had been shut down since June 19, and there was no hope of gas restoration in the near future. “As such, in spite of having enough installed capacity to meet our urea needs, we have no choice but to resort to expensive import of urea,” the petroleum ministry summary said.

According to urea availability situation in country, the opening balance of urea is 0.465 million tons in October, domestic production to be around 1.98 million tons, urea under import 0.30 million tons and there would be a total 2.745 million tons availability from said three sources from Rabi season.

However, on the demand side for Rabi Crop 2012-13, during Oct 31, to March 31, 2013, Punjab would need 2.124 million tons of urea, Sindh 0.551 million tons, Khyber Pakhtunkhwa would require 0.227 million tons and Balochistan would need 0.150 million tons, making a total requirement of 3.052 million tons.