Potassium sulphate at Gwadar Port: Export approval likely for 2 firms under close watch

ISLAMABAD: The federal government is likely to allow two companies to export potassium sulphate from Gwadar Port along with strict monitoring of quantitative restrictions to be put in place in customs WeBOC system in order to check export data on real-time basis, sources told media.

Sharing the details, sources said, two major industries namely M/S Agven Private Limited (fertilizer) and M/S Hangeng Trade Company Private Limited (meat and agriculture processing) are fully established and operational in the Gwadar North Free Zone.

M/s Agven is a fertilizer production company registered in North Free Zone. The company has started production of potassium sulphate from its plant with a capacity of producing 20,000 tons per annum.

Gwadar Free Zone: ECC approves limited export of potassium sulphate fertiliser

Potassium Sulphate fertilizer overall consumption in Pakistan is 50,000 tons per annum (average as per National Fertilizer Development Center data), whereas the overall production installed capacity in Pakistan is 65,000 tons per annum, including the 20,000 tons per annum in Gwadar Free Zone.

The company intends to export its production abroad in its application of October 28, 2024.

The company has stated that it does not use any subsidized raw materials or resources from Pakistan including use of gas as raw material.

The main raw material viz potassium chloride is directly imported from abroad. It is not sourced from the tariff area of Pakistan and does not impact the supply of fertilizer for domestic use.

According to MoMA, export of urea/fertilizers is banned and are subject to the provisions of serial No.11 and 12 of Schedule-I of Export Policy Order, 2022. Multiple meetings have been held with Ministry of Industries and Productions, Commerce, and FBR to resolve the issue but the only way forward found out is to relax the Export Policy Order, 2022 for the export of potassium sulphate (K2SO4) fertilizer from Gwadar Port.

Gwadar Port Authority has supported the request of the company for exemption of the Export Policy Order, 2022 to the extent of potassium sulphate (K2SO4) fertilizer by M/S Agven Pvt Ltd, as the export of the commodity would help in development and operationalisation of Gwadar Port.

The export will also allow the expansion of capacity inside Gwadar Free Zone and generate export revenue.

The draft summary was circulated to the Ministries of Commerce, Industries & Production, National Food Security & Research and Federal Board of Revenue for views/comments. Besides, Ministry of Industries & Production conducted two meetings and another meeting was held by SIFC on export of potassium sulphate fertilizer from Gwadar Free Zone.

In the light of deliberations, input from the stakeholders and decisions taken in the above meetings, the proposal of the Summary has been amended. Minutes of the meeting of FRC and views of all the stake holders are identified respectively. All stakeholders have supported export of a maximum of 10,000 tons of Potassium Sulphate (K2SO4) per annum by the manufacturing companies in Gwadar Free Zone with some stipulations.

MoMA has that Ministry of Commerce may make amendment in Serial No. 12 of Schedule-I of the Export Policy Order (EPO), 2022, inserting exception in column 4 for companies manufacturing in Gwadar Free Zone for export abroad of Potassium Sulphate fertilizer (K2SO4) (HS. Code: 3104.3000) from Gwadar Port in relaxation of EPO, 2022 subject to following stipulations: (i) a maximum of 10,000 tons per annum or 50% of the actual annual production of potassium sulphate, whichever is less;(ii) this permission will be for one year till 31st December 2025 and will be implemented in two parts by allowing a maximum 5,000 tons by June 30th 2025, and remaining 5,000 tons by December 31, 2025 (plus or minus any balance quantity to June 30th); (iii) Ministry of Industries and Production/Fertilizer Review Committee (FRC) will ensure to collect data input related to Production and export abroad on monthly basis from the manufacturers inside the Gwadar Free zone and will review the export abroad on annual basis; (iv) Ministry of Industries & Production will notify the decision for export abroad of potassium sulphate fertilizer (HS Code 3104.3000) and convey the same to the FBR and the relevant ministries/divisions; and (v) the FBR will update its system with respect to export abroad of Potassium Sulphate (K2SO4) as per above detail from Gwadar Port.