Saudi Arabia Basic Industries Corporation (SABIC) has assured supplying some 60,000 ton urea this month under the credit facility, being provided by Saudi Fund for Development (SFD). Sources told Business Recorder Monday that at the outset of the Kharif season, the country is facing shortage of over 0.35 million tons of urea and the federal government is planning to import the commodity from the international market as well as making efforts for timely arrival of the commodity from the SABIC.
Following the directives of federal government, the Trading Corporation of Pakistan (TCP) signed a deal with the SABIC in March last year (2014) for supply of urea against $125 million credit facility given by SFD. Since the signing of the agreement, the TCP is making all-out efforts for the timely import of urea to avoid shortage in the country and during the last one year, SABIC has supplied over 0.3 million tons of urea, while some 60,000 tons has also been assured during this month.
"The SABIC has committed to supply 55,000 to 60,000 tons of urea to Pakistan in April 2015. As per schedules submitted by the SABIC, the first shipment carrying approximately 37,000 tons of urea will arrive in next two weeks, while the final consignment, under the current import, is likely to reach by the end of this month," sources said.
With the arrival of these two shipments, import under the current SFD credit facility is over as the SABIC has supplied about 309,000 tons of urea during last one year. This includes some 120,000 tons in Kharif 2014 and some 190,000 tons in recently closed season - Rabi 2014-15. Moreover, it is being estimated that after the arrival of assured supply, overall urea dispatches from the SABIC will reach 365,000 tons against $125 million SFD credit facility, they added.
Sources said that another import of some 0.38 million tons for Kharif 2015 is under consideration and the Economic Co-ordination Committee of the Cabinet is likely to take a decision in its next meeting. Presently, the ministry of industries and production has sought comments from the TCP on urea import.
They said as per past practice, the TCP is only responsible for the import of the commodity, while the transportation and distribution of the commodity will be handled by M/s National Fertilizer Marketing Limited (NFML).
The domestic market is witnessing urea shortage for last four years followed by gas curtailment to fertiliser sector and despite having a domestic production capacity of over 6.5 million tons against 5.5 million tons demand the domestic fertilizer plants are unable to produce sufficient urea due to continued gas shortage.
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