ISLAMABAD: With Rabi sowing at a critical stage, the government on Thursday delayed a decision to import urea, which is estimated to be short of requirement by 1.2 million tons because of inadequate supply of gas, and instead allowed import of 100,000 tons of sugar to cover a shortage arising out of damage suffered by the sugarcane crop in Sindh from devastating monsoon rain and flood.

A meeting of the Economic Coordination Committee (ECC) of the cabinet, presided over by Finance Minister Dr Abdul Hafeez Shaikh, also allowed the Zarai Taraqiati Bank to gradually increase its mark-up rate by more than 5 per cent to about 14 per cent.

An official announcement said: “The ECC allowed one lakh tons of sugar instead of the proposed quantity of seven lakh tons by the Utility Stores Corporation to maintain stability in the market and ensure sugar availability.”

Sources said the ministry of industries had sought 700,000 tons of sugar in view of widespread damage to the sugarcane crop.

But the finance ministry believed the current stocks were sufficient to meet immediate requirements because cane crushing season was round the corner. There was a view that even if the shortage pushed up the price, it will be for a short period which could be offset by the import of 100,000 tons.

The sources said the country might face urea shortage of up to 1.2 million tons because gas supply to the fertiliser industry remained suspended for 60 days this year, up from 45 days last year.

Punjab Chief Minister Shahbaz Sharif is reported to have requested the federal government to urgently import urea during Rabi season.

The urea shortage is expected to become a major political issue in the run-up to the coming Senate elections.

The ministry of industries had moved a summary for importing urea, with the quantity depending on two possible scenarios of gas supply disruption. In the first case, the ministry suggested import of 700,000 tons, 300,000 tons by the end of the current month and 400,000 tons in November. In the second case, the ministry proposed import of 1.2 million tons in three instalments of 400,000 tons in October, November and December.

Finance Secretary Dr Waqar Masood told the ECC that there was a stock of 122,000 tons of fertiliser for Rabi crop.

An official statement said the ECC constituted a committee comprising the ministers for production and petroleum and the finance secretary to meet senior minister for industries Pervez Elahi and firm up proposals for the next ECC meeting. In such a situation, it may not be possible to import urea this month.

The meeting discussed a summary of the commerce ministry seeking a ban on export of animals. An official said the commerce secretary told the ECC that the ministry had received a request from the Pakistan Tanners Association and Federation of Pakistan Chambers of Commerce and Industry and other stakeholders involved in export of value-added leather products.

He said the stakeholders had reported an acute shortage of raw material which was leading to an exorbitant increase in prices of livestock and if the situation persisted, exports of finished leather and value-added leather goods would be adversely affected.

The ECC asked the commerce ministry to resubmit the summary after detailed consultations with Balochistan and Khyber Pakhtunkhwa, for whom livestock export is a major source of income.

The meeting also directed the commerce ministry to curb smuggling of cattle and regulate mechanism for livestock export.

The ECC was informed that wheat stocks stood at 8.6 million tons on Oct 10, to be released by provincial food departments and Passco to flour mills.