FMPAC hopes new government will revive agri sector

Fertilizer Manufacturers Pakistan Advisory Council (FMPAC) has congratulated the PML-N and its leadership for securing a majority in the general elections and hopes that the new government will revive the agriculture sector to ensure farmers’ wellbeing and the country’s food security. “With the PML-N government coming into power, we are confident that Nawaz Sharif will ensure early revival of the agriculture sector through better long-term policies,�? Shahab Khawaja, executive director of FMPAC, said. “The PML-N fully understands the importance of agriculture sector for economic revival. The fertilizer sector, being an integral part of the agriculture sector, should be given due importance while allocating gas resources.�? He added that Nawaz Sharif’s pro-industry approach, which he demonstrated in his previous governments, provides relief to industries and it was his government’s policies that led to the rise in fertilizer production. “Due to gas curtailment to the fertilizer sector in the last three years, $1.5 billion was spent on foreign exchange and subsidy worth Rs 80 billion was spent on imports of 3.4 million tons during 2010-12,�? said Khawaja. “Fertilizer sector is the only sector bringing in foreign direct investment. Gas curtailment has resulted in closure of fertilizer plants, risking billions of dollars of investment in the sector.�? He said that fertilizer plants invested $2.3 billion in the last four years, making Pakistan self-sufficient in urea production. With consistent gas supply to these plants, the government can ensure timely availability of this key farm input to farmers at cost-effective rates, which will also help the government to reduce the rising fiscal deficit as well as subsidy expenditure, he added. Khawaja said that Pakistan cannot afford to spend hundreds of millions of dollars on urea import and the FMPAC is hopeful that the PML-N will ensure judicious distribution of gas among all economic sectors. �?All other industries have alternative fuel options, except fertilizer, which uses gas as a raw material to produce urea for farmers and also ensure the country’s food security as well as provide raw material to textile and food processing industries,�? he said. “Sui Northern Gas Pipelines Limited-based four plants faced more than 300 days of gas curtailment in 2012. If gas is not provided to fertilizer plants in 2013, the country will have to import one million tons of urea that will cost the national exchequer $450 million and a subsidy of Rs 21 billion to match the imported urea price to domestic prices.�? Khawaja added that the fertilizer sector is not burning gas to run plants but offers maximum value addition by converting raw gas into precious urea grains, which is significant for the fertilizer industry. He informed that by not producing urea locally, the country has to import urea, which is the most expensive form of energy on an MMBTU basis, costing $23/MMBTU, whereas RFO and LNG cost 30 to 50 percent less than urea on an MMBTU basis.