The Economic Coordination Committee (ECC) approved the import of 100,000 tonnes of urea from a UAE-based firm through open tender to ensure stable prices in the market.
The decision was made at an ECC meeting presided over by Finance Minister Mohammad Aurangzeb. The move aims to ensure sufficient supplies of urea and stabilise fertilizer prices during the cropping season.
The ECC had previously allowed the Trading Corporation of Pakistan (TCP) to import 200,000 tonnes of urea through open tender and government-to-government (G2G) basis.
This decision was ratified by the federal cabinet in May and June. The TCP issued a tender for 150,000 tonnes, which was opened on July 29, receiving six bids. The lowest bid was from M/s West Trade International FZE of the UAE at $358.99 per tonne.
TCP reported that negotiations with Malaysia and Azerbaijan offered higher rates than the tender, while negotiations with Turkmenistan and efforts to get approval from China’s National Development and Reform Commission were still ongoing. The cost estimate for importing 157,500 tonnes of urea was about Rs18.489 billion.
As per reports, the Fertilizer Review Committee (FRC) examined data for the Kharif 2024 and Rabi 2024-25 seasons, showing no shortage provided RLNG-based plants remain operational.
However, a gas supply suspension to RLNG-based plants during Rabi season 2024-25 would result in a shortage of 351,000 tonnes. Hence, importing 100,000 tonnes of urea was deemed necessary for market price stabilization.
The ECC approved the procurement of 100,000 tonnes of urea from the lowest bidder, M/s West Trade International FZE of the UAE, at $358.99 per tonne.
The first shipment of the imported urea is expected to arrive at Karachi port on August 16. The total dollar requirement for the import was reported at $56.540 million, with an additional $35.899 million needed for the extra 100,000 tonnes. The ECC’s approval was required due to the bid expiry on August 3.
In a related development, Urea sales in Pakistan for July 2024 are projected to reach 611,000 tons, marking a 3% decline year-over-year from 629,000 tons in July 2023. Despite this decrease, sales are expected to rise by 27% month-over-month due to seasonal factors, data released by the AKD Research showed.
Among the major players, Engro Fertilizers is predicted to see a year-over-year decrease of 7%, with sales projected at 247,000 tons for July 2024. However, Engro’s monthly sales are expected to grow by 59% compared to June 2024, following a nearly three-week plant shutdown for maintenance.
Fauji Fertilizer Company is expected to report July sales of 211,000 tons, reflecting a 6% year-over-year increase. In contrast, FATIMA Fertilizer’s sales are projected to fall by 10% year-over-year to 93,000 tons, while Fauji Fertilizer Bin Qasim (FFBL) anticipates a 4% year-over-year decrease, with sales estimated at 37,000 tons.
