2008 melbourne hafiez slides
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FERTILIZER SUBSIDY IN PAKISTAN
Lt Gen. Munir HAFIEZ (Retired)
Fauji Fertilizer Company Ltd., Pakistan
Fauji Fertilizer Company Ltd.
93 Harley Street, P.O. Box 253, PakistanTel: 92 51 9272301 - Fax: 92 51 9272519
E-mail: [email protected]
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(content as provided for distribution in Melbourne)
All the papers and presentations prepared for the
2008 IFA Crossroads Asia-Pacific in Melbourne will be
compiled on a cd-rom to be released in December 2008.
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FERTILIZER SUBSIDY IN PAKISTAN
Munir Hafiez
Chief Executive & Mana in Director
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Fauji Fertilizer Company Ltd. Pakistan
CONTENTS
Brief History
Fertilizer Subsidy Regime
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Outlook
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CONTROLLED/ REGULATED PHASE1955 - 1985
Regulated Fertilizer Prices
Controlled Farm Output Prices
Dominating Public Sector InManufacturing / Marketing / Import
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Pakistan (GOP)
Provincial Quotas
DEREGULATION PHASE1986 - 1995
ncen ves or r va e nves men
Guaranteed Return On Investment
Tax Holidays
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Duty Free Import Of Raw Material /
Machinery
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DEREGULATED PHASE
1986 ONWARDS Deregulation By GOP
Phosphatic 1993 Potassic 1995
Increased Emphasis On Privatization ofFertilizer Business / Manufacturing
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Support Price For Major Crops By GOP
Quotas Abolished
Elimination of Subsidies
CHANGE IN INTL. FERTILIZER MARKETIMPACT ON PAKISTAN: 2004 ONWARDS Pakistan dependant on fertilizer imports to
supplement domestic production for meeting local.
Increasing international fertilizer prices oblige GOP
to consider subsidy on fertilizers. Need for subsidy to:
Provide fertilizers to farmers at affordable
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pr ces.
Promote balanced fertilizer use.
Maintain growth in agriculture sector.
Provide raw materials for local industry.
Ensure food security.
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RE-INTRODUCTION OF FERTILIZER
SUBSIDES
2004: Increase in international urea price.
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itself & subsidizes difference between
domestic & international price
2006: Steep rise in international
phosphatic & potassic fertilizer prices.
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GOP allows subsidy to private sector ondomestic production & import of these
fertilizers also.
SUBSIDY ON FERTILZERS
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* Budget figure
** Calculated on prevailing exchange rate
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FERTILIZER SUBSIDY - OUTLOOK Two new urea manufacturing facilities expected
on stream in Pakistan during 2009 & 2010 afterw u w ucountry.
Subsidy on urea likely to continue during 2009.Total outlay will go down due to decrease ininternational prices.
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prices subsidy on these fertilizers expected to beeliminated during 2009.
Subsidy on potassic fertilizers likely to continue.
Thank YouThank YouThank YouThank You
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