ISLAMABAD (June 22 2009): The Industries Ministry has reportedly been directed by the Cabinet to remove complaints of Punjab and Sindh governments with regard to distribution of imported urea fertiliser for Kharif crops, official sources told Business Recorder.

The Cabinet\'s decision to import 0.3 million tons urea through Trading Corporation of Pakistan (TCP) is, however, not a good news for those officials of Industries Ministry tempted to make money by facilitating fertilizer distribution licences to the private sector. Some visitors were seen by this correspondent in the corridors of Industries Ministry, seeking information on how to obtain fertilizer distribution licence.

The Cabinet, in its meeting on June 17, decided that dual mechanism of simultaneous distribution through both the public and the private sectors was likely to result in mismanagement for the Kharif crops. The complaints against private dealers and action taken by provincial governments on this account also came under discussion.

A meeting is scheduled for Monday, at National Fertilizer Corporation (NFC) headquarters in Lahore, to finalise urea distribution strategy and modalities.

Sources said that Industries Ministry would be responsible to ensure that provincial requirements are adequately met, on time, and the observations of Punjab and Sindh regarding fair, fast and timely distribution are satisfactory addressed through regular interface and strict monitoring.

At a recent meeting in Industries Ministry, TCP Chairman apprised the participants about the procedure and timing involved in various stages from international tendering to the opening of LCs and arrival of the urea consignment at Gawadar Port.

He said that TCP had to pay huge demurrages in the past. To preclude such a situation, in case of simultaneous arrival of ships and avoiding a glitch, ships could be allowed to be diverted from Gawadar to Karachi Port to ensure a successful emergency operation, facilitating arrival of urea imports, and their speedy offloading.

The meeting was apprised about the position of urea during Kharif, 2009 based on the following position for the whole country by MD, NFML: rice 7,244,114 acres, cotton 7,044,022 acres, sugarcane 2,558,058 acres, maize 2,440,410 acres, and total 19,286,604 acres.

The province-wise acreage was: Punjab 69 percent, Sindh 19.9 percent, NWFP 8 percent and Balochistan 3 percent. Total urea demand during Kharif is 2.9 million tons, whereas local production was 2.5 million tons. Already imported stocks stood at 2,31000 tons (May-164,000 tons, June -33,000 tons, carryover stock 34,000 tons). During May and June 2009, MNFL had already distributed 130,000 tons.

Urea stocks available: 101,000 tons (NFML Store 50,000 tons; TCP store 42,000 tons; in transit from Gawadar 9000 tons). The urea imports of 555,000 tons were in the pipeline (reaching in June 220,000 tons; July 35,000 tons). As such, total availability was 656,000 tons (555,000 tons plus 101,000 tons). The basic strategy agreed upon by all participants was to flood the market with sufficient stocks to obviate any chances of fertiliser shortages.

After discussion, following decisions were taken:

a) Import on fast track:

The issue of whether the entire 0.3 million tons urea ie including the strategic reserves, was to be imported as part of the \'emergency requirement\' of urea stocks was already discussed and allowed in the June 17, 2009 Cabinet meeting.

TCP to make efforts to ensure that, tenders for import of urea in the pipeline including the 0.3 million tons will be finalised on 27, 30, June and 1 July, 2009, while LCs will be opened by July 8. These urea consignments will as such arrive by end of July 2009.

Karachi Port can be used in case of simultaneous arrival of shipments. The issues of awarding transportation tenders to Balochistan-based transporters will be discussed with the provincial government. The Ministry of Finance undertook to release funds on time.

b) Jointly co-ordinated and monitored Distribution Plan:

Minister of Industries and Production will meet the provincial governments for a jointly co-ordinated and monitored distribution plan for local and imported fertiliser.

Each district would have dealers in proportion to its area under cultivation. However, smaller districts would have a limit of 15 and the larger ones of 30 dealers per district. This would be in addition to the bulk stores of NFML at Aminabad, Jhang, Lodhran and Okara in Punjab and Shujabad in Sindh. Those dealers who do not make it to the final list will have their security deposits returned forthwith.

Each dealer would be, on average, issued 10,000 bags in a month. NFML would ensure fast track distribution of 0.321 million tons and 0.335 million tons of urea (subject to arrival), in June and July 2009 respectively through the dealer network.

c) Monitoring of Domestic Supplies:

To ensure that the domestically produced fertiliser reaches the growers and dealer outlets, the dealers would be responsible to ensure intact arrival of urea at their outlets. This stipulation would be added in the Terms of References (ToRs) of the dealers\' contract.

The fertiliser manufacturers would be asked to send the lists of their dealer networks by e-mail. Thereafter, the lists will be forwarded to the provincial governments.

To ensure transparency in distribution of locally manufactured urea the representatives of Minfa, NFC and provincial governments would be deputed to monitor the dispatch of urea from the Fertiliser Manufacturing units.