Sufficient stocks available: SABIC suspends further urea supply to local market

On the request of the Trading Corporation of Pakistan (TCP), Saudi Basic Industries Corporation (SABIC) has suspended urea supply as sufficient stocks are available in the domestic market. Sources told Business Recorder on Wednesday that following the directives of the Ministry of Industries and Production (MoIP) the state-run grain trader had asked SABIC to postpone the urea shipments till the further demand.
In March this year, a commercial agreement was signed between the TCP and SABIC for the supply of urea against $100 million credit facility being provided by the Saudi Fund for Development (SFD). The expected supply against this agreement was estimated approximately 300,000-330,000 metric tons urea, depending on the international price, during one year.
SABIC assured a supply of 170,000 tons urea by end June, while the remaining quantity was scheduled to arrive during July 2014 to March 2015 till the utilisation of the entire credit facility.
The sources said that so far some four consignments of cumulatively 120,000 tons urea had arrived from Saudi Arabia during April-May this year and two more consignments were due in June, however on the request of the TCP, SABIC had suspended further supply to Pakistan. Last urea consignment under the SABIC agreement arrived on May 27, 2014 as MV Kroline Snug carrying 29,938 urea berthed at the Gwadar port.
"We have one year agreement with SABIC for the supply of urea against $100 million credit facility and the supply has temporarily stopped as sufficient urea stocks are available in the country," an official said. He said that the TCP had sent a suspension request on the directives of the Ministry of Industries and Production and the supply would be resumed, when a demand would be raised by the Ministry or National Fertiliser Marketing Company (NFML) ahead of a domestic market requirement.
"We are in touch with SABIC and they have already assured supply as per our requirement," he added. Presently, thousands of imported urea is lying in the godowns of the NFML and they are unable to offload imported commodity due to higher transportation expanses. The government had also announced Rs 20 per 50-kg bag subsidy for imported urea to increase the commodity sales, sources said.
They said that although Pakistan was facing some shortage of urea, however presently sufficient stocks were available with the NFML to meet the domestic demand for Kharif season. They informed that under the current agreement SABIC had supplied some 120,795 tons urea through four shipments, of which 120,744 tons had been lifted by the NFML.