ISLAMABAD - Federation of Pakistan Chambers of Commerce & Industry (FPCCI) has said the fertiliser industry is virtually the backbone of the agriculture sector and government may allow exporting surplus urea to facilitate country exports.

Chairman Standing Committee of FPCCI, Ahmad Jawad said, “Our urea plants are running on full capacity and they annually produce 6 million tons and consumption of the industry is 5.4 million tons and you have the surplus urea of 0.6 million tons every year”.

“If we carry forward the last year stock the country could easily export 1.2 million tons which means you may earn $220 million dollars, a handsome contribution in the current scenario of dwindling exports. As internationally per ton price of urea varies from $ 190-220, it is an appropriate rate for the local manufactures,” he said.

Jawad said currently export of urea was banned by the government; however in Musharaf government the proposal was floated by the private sector regarding urea export and it had been discussed in detail at an inter-ministerial meeting chaired by the then Minister for Industries and Production, Jahangir Khan Tareen, but deliberations deadlocked when fertiliser sector declined to give any guarantee on price.

“We can set a mechanism in order to allow export of urea through imposition of regulatory duty, but can continue with subsidized urea prices for local consumption as heavy subsidy on urea production in the shape of subsidy on feedstock gas,” Jawad added.

FPCCI official further said during the period 1983 to 1986 when a large urea surplus existed in the country, FFC Company had the honor of being pioneer in the export of surplus urea which not only helped in stabilizing domestic urea market but also earned valuable foreign exchange for the country.

He also said the local fertiliser sector is also facing a combination of internal and external challenges. “Deteriorating sector fundamentals have taken toll on share prices of fertiliser stocks with Fauji Fertilizer Company, Engro Fertilizer, and Fatima down an average of 29 percent from last 12 month peaks,” he said.