ISLAMABAD, June 27: The federal government is likely to increase the support price of basmati rice paddy by about 10 per cent and import 250,000 tons of urea for Rabi season. The Economic Coordination Committee (ECC) of the Cabinet is expected to approve the proposals in a meeting to be held on Wednesday under the chairmanship of Prime Minister Shaukat Aziz. The meeting will also consider a proposal to set up a dry port at Sukkur.

Sources told Dawn on Monday that the ministry of food, agriculture and livestock (Minfal) has proposed to increase the support price of basmati and Irri-6 rice by Rs50 per 40-kg.

It has proposed to increase the support price for basmati from Rs510 to Rs560 per 40-kg and that of Irri-6 to Rs260 per 40-kg.

The ECC had directed the authorities concerned about a month ago to look into the feasibility of a dry port at Sukkur and would consider a report on the subject in its Wednesday meeting, the sources said.

The ECC would also allow import of 250,000 tons of urea with immediate effect to ensure that the shipments start reaching before the shortage really takes place.

The import would take place through the Trading Corporation of Pakistan (TCP) and would be exempted from duties and taxes. Imports by private sector are normally subject to six per cent withholding tax, three per cent income tax and 15 per cent sales tax.

The TCP is currently in the process of importing about 218,000 tons of urea for Kharif season. The 250,000 tons would be in addition to the imports already in process and would be utilized in Rabi season.

A senior official of the finance ministry said the TCP had imported last year 168,000 tons of urea but requirement had gone up for the next year to 250,000 tons.

The fertilizer off-take stood at 2,811.4 thousand nutrient tons in July-March 2004-05, showing an increase of 10.2 per cent when compared with the 2,552 thousand nutrient tons in the corresponding period of the previous fiscal year.

The consumption of fertiliser had considerably increased over the last year but the production did not keep up with the pace.

The production increased by 5.12 per cent in the first ten months of the 2004-05 fiscal year and stood at 4,928,016 metric tons against the 4,688,099 metric tons in the corresponding period of the previous fiscal year.

Urea fertiliser being the principal input for most of the Rabi crops, the government had decided to import additional urea quantities in advance to keep prices under control.

In the month of May 2005, urea off-take increased by 35 per cent compared with the same month last year on the back of a higher demand due to increasing agriculture activities.

According to National Fertilizer Development Corporation (NFDC) report, the total urea consumption in the country surged to 267,000 tons last month against 197,924 tons in May 2004, with the prices remaining flat at Rs484 per bag.

In May, the nitrogen off-take surged by 28.7 per cent, and phosphate off-take increased by 64.8 per-cent. Potash off-take also witnessed an increase. Product-wise, urea went up by 27.9 per cent and DAP off-take by 96.6 per cent, says the report.

With provisional off-take estimates available for May 2005, total nutrient off-take during Kharif 2005 (April-May) was about 482,000 tons, which witnessed an increase of 50.8 per cent over the same period of Kharif 2004.

At present, the prices of urea and DAP are ranging between $240-245 per ton and in US-Gulf they ranged between $220-225 per ton.