Purchase of urea: Saudi Arabia requested to give $300-400 million credit facility

Pakistan has requested Saudi Arabia to provide $300-400 million credit facility for purchasing urea, well-placed sources told Business Recorder here on Saturday. This is in addition to the request made by the government of Pakistan for a $5.9 billion oil facility.
Last month, the Saudi authorities provided a credit facility of $125 million for fertiliser. This amount is over and above the credit facility of $133 million that was provided for the same purpose one and a half month ago. Thus far the Saudis have extended $258 million for purchase of urea.
Ziaur Rehman, Secretary, Ministry of Food, Agriculture and Livestock (Minfal), has left for Saudi Arabia to negotiate with the concerned authorities the additional credit facility of $300-400 million, sources said. They contend that Pakistan government is seriously considering requesting Kuwait for a similar facility to purchase fertiliser.
Sources said that almost 85 percent of our domestic requirement of urea is met through local production, but due to increase in the cultivation of rice which requires plenty of urea, a shortage of the commodity in the local market has erupted. "The international price of rice is on the rise which accounts for a corresponding rise in the area under rice cultivation," sources added.
The price of urea in the international market is $800 per ton while in Pakistan growers are purchasing it at $200 per tons. This huge difference has created shortage of the commodity in the market.
Well-placed sources say that fertiliser is also being hoarded and smuggled. They maintained that the total stocks of DAP available with the government stands at 0.475 tons. They said that in local market, the price of urea has increased. "After an increase in gas prices, urea manufacturers have increased the price of the commodity from Rs 625-Rs 700 per 50-kg bag."
The government is also importing 350,000 tons urea for the ongoing Kharif season to meet the shortfall and the TCP has placed tenders for the import of the commodity. They said that the Ministry of Food is hopeful that 20,000 tons urea would be imported from Saudi Arabia in next 2-3 days. The total consumption of fertilisers in the local market is 7 million tons, of which 5.4 million tons is urea fertiliser while the remaining 1.6 million tons is phosphorous and potassic fertilisers.