TCP finalises deals for import of 200,000 tons of urea

RIZWAN BHATTI

KARACHI: Trading Corporation of Pakistan (TCP) made arrangements for the maximum availability of urea in Rabi season and almost finalized deals for import of some 200,000 tons commodity on Monday.

Presently, the country is facing a massive shortage of urea as the local production is on decline due to unavailability of gas to the local producers. On the other side, Rabi season has started and farmers need huge stocks of urea for their crops.

In order to avoid any urea shortage during Rabi, in the first week of this month the Economic Co-ordination Committee (ECC) of the cabinet asked the state-run grain trader - Trading Corporation of Pakistan (TCP) to import 0.3 million tons of urea on urgent basis for local consumption.

Following the directives of the federal government, the state-run grain trader is making arrangements for timely import of urea and after receiving written directives from the ECC, the TCP floated an international tender on August 9, 2012 with opening date of August 27, 2012 for the import of 300,000 tons of urea.

In response of the TCP’s tender, opened on Monday, some 12 international pre-qualified bidders participated and agreed to supply commodity as per term and conditions announced by the TCP.

The prices quoted by international suppliers ranged between $399.38 and $419.63 per metric ton. The lowest bid was submitted by M/s. Key Trade Switzerland, which offered to supply 100,000 tons of urea including 50,000 tons as per tender and an optional supply of 50,000 tons at $399.38 per ton. Therefore, the TCP has finalised a deal for the import of some 100,000 tons with M/s. Key Trade Switzerland.

As the ECC of the cabinet has allowed TCP for price matching, it offered other participants of the tender to match lowest prices and in response of the TCP’s offer, some two bidders are agreed to match and supply commodity.

Sources said that second lowest bidder namely M/s Dreymoor Fertilizer also agreed to supply 50,000 tons of urea at lowest price, earlier its submitted bids $407.15 for 100,000 tons of supply.  In addition, M/s CHS Europe, which quoted $407.69 in the tender, accepted the TCP’s offer and agreed to supply 50,000 tons of urea at $399.38 per ton.

Although talks for the import of 200,000 tons of urea have almost finalised with three parties, however contract will be awarded after the confirmation of all technical specifications.

Sources said that the TCP has asked all other bidder to consider their bids and reply the TCP till 12 pm today, if they agreed to match lowest bid.

It is being expected that some more bidders will match lowest price and deals for remaining quantity of 100,000 will also be finalised on Tuesday, they added.

Pricing matching formula has eased tender process and now TCP can finalise contact for import of 300,000 tons of urea through one tender, they said.

It may be mentioned here that following the directive of the ECC, the TCP has already awarded contract for import of 300,000 tons, out of which some 200,000 tons of commodity has already arrived.