Pakistan’s government has unveiled a significant subsidy worth PKR 6 billion ($21.47mn) to support the importation of urea fertilizer for the fiscal year 2023-24. Crafted through extensive consultations with stakeholders, this subsidy aims to stabilize urea prices and ensure its availability to local farmers. By facilitating the distribution of imported urea alongside locally produced variants through fertilizer companies’ networks, the initiative seeks to maintain a consistent pricing structure throughout the agricultural season, bolstering farmers and securing food supplies.
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The subsidy comes in the wake of the National Fertilizer Marketing Limited (NFML) receiving a substantial shipment of 220,000 tonnes of urea fertilizer from Azerbaijan, arranged under a government-to-government agreement. Supplied by SOCAR, the Azerbaijani state-owned company, the urea was acquired at a competitive rate of $388.50 per tonne, with a deferred payment mechanism devoid of interest or guarantees.
Under the leadership of Federal Minister for Finance, Revenue, and Economic Affairs, Dr. Shamshad Akhtar, Pakistan’s Economic Coordination Committee of the Federal Cabinet has endorsed the distribution of this imported urea through private manufacturing entities. These include prominent players such as Fauji Fertilizer Company Limited, Fauji Fertilizer Bin Qasim Limited, Engro Fertilizers Company Limited, Fatima Fertilizer Company Limited, and Agri Tech Limited, all of which have formalized agreements with NFML.
Pakistan’s total liquid foreign reserves reach $ 13.149 billion
To support this initiative, the Economic Coordination Committee has adopted a cost-sharing strategy for the subsidy, with 50% funded by the federal government and the remaining 50% by the four provinces. This decision was made possible by a technical supplementary grant to the Ministry of Commerce, with the ECC approving a release of PKR 6 billion ($21.47mn) to facilitate the distribution of imported urea.
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