Fertilizer manufacturers in order to get rid of the accumulating yearly surplus stocks have demanded a change in the urea export policy.

Existing urea export policy has numerous flaws in it and the council has repeatedly urged the government to review and make strategic changes in this policy in order to facilitate the surplus urea inventory said Fertilizer Manufacturers of Pakistan Advisory Council (FMPAC).

FMPAC stated that due to gap between production and domestic consumption 0.6 million tons of urea accumulated each year. A ‘tight timeline’ has been given to export the surplus by October end with a penalty of 15 % of the export-price if of failed to export within deadline by State Bank of Pakistan.

Council reasoned that Pakistan’s industry has had only a limited international market, exporting urea within restricted passé is a tough job. Industry was reluctant to get fresh export orders for penalty, it added.

Industry said that around 1.5 million tons of the existing fertilizer carrying costs and storage is an immense financial burden on already heavily-taxed sector. So, they demanded government to lessen export timeline.

If the last years stock is carried forward to export 1.2m tons of surplus fertilizers cost $200m, without upsetting local supply as domestic demand for urea is expected to remain flat this year.

Critics argued that fertilizer manufacturers have heavily subsidized gas price for their feedstock precisely to help agriculture. Critics contended that if the manufacturers wish to export their product, then they should pay the market price for their feedstock gas after withdrawal of subsidy.