Pakistan cancels plan to import 100,000 metric tons of urea from UAE-based company

Pakistan's federal cabinet, led by Prime Minister Shehbaz Sharif, decided to cancel plans to import 100,000 metric tons (mt) of urea from United Arab Emirates-based company West Trade International FZE, sources informed Nukta on Thursday.

Last month, the country's top economic decision-making body — the Economic Coordination Committee — had approved the Ministry of Industries and Production's proposal to import urea, which would be needed once gas supply to fertilizer plants is stopped after September.

The ECC had made the decision not only to ensure sufficient supplies of urea in the market but also stabilize fertilizer prices during the season.

A government document available with Nukta shows that West Trade International FZE had offered a rate of $358.99 per metric ton on a tender opened by Trading Corporation of Pakistan for import of 150,000 metric tons of urea.

According to the TCP, it was the lowest among the six bids received.

The TCP had also held government-to-government (G2G) negotiations with Malaysia and Azerbaijan but their offered rates were higher.

During its meeting, the cabinet also rejected a proposal to give a PKR 5.8 billion subsidy for urea imports.

The sources said that instead of approving the import, the federal cabinet directed the Ministry of Industries and Production and the Ministry of Commerce to supply gas to local fertilizer companies beyond September to meet local demand.

The Ministry of Industries and Production has estimated that the cost of per bag of imported urea for a total quantity of 157,500 metric tons will be around PKR 7,332.59, including PKR 1,500 per bag incidental charges of National Fertilizer Marketing Limited. The prevailing urea fertilizer price in market is PKR 4,400 per bag.

The sources said that if the government suspends supply of gas to RLNG-based fertilizer plants during Rabi season, there would be a shortage of 351,000 metric tons.