TCP likely to scrap urea import deal

Trading Corporation of Pakistan (TCP) is likely to scarp/cancel the last 50,000 tons of urea import deal, if cargo loading was not confirmed by Pre-Shipment Inspection Agent (PSIA) at Ukrainian Port.
Sources told Business Recorder on Friday that urea import was being delayed as an international supplier namely Global Energy and Commodities Exchange had failed to make shipment of 50,000 tons of urea as per agreement with state run grain trader and despite one-month grace period still shipment of cargo had unconfirmed.
In the recent development, the Global Energy and Commodities Exchange (local agent Green House) has informed the corporation that loading of urea has started at Odessa Ukraine Port and vessel will be reached Pakistan during next week.
During the last week, supplier assured TCP's officials that loading of urea from Jebel Ali Port of United Arab Emirates would start from March 12, and consignment would reach Gwadar Port during next week. However, this time, the supplier has changed the port and vessel name, previously one bulky ship was nominated for the complete supply of commodity and Jebel Ali Port of UAE was mentioned as loading port. While in fresh detailed given by the supplier, one small ship has been nominated for 50 percent delivery of urea.
According to information received by TCP from supplier, MV EMMA SOPHIE has been nominated for a quantity of 25,000 tons of urea as against agreement of 50,000 tons. As per initial information that cargo was being loading on the vessel at Odessa Ukraine Port and supplier had also asked for a pre-shipment inspection to sail the ship for Pakistan, they said.
"PSIA, nominated by TCP, has also confirmed the TCP that they have received a letter for inspection of urea from supplier and they will visit and conduct the inspection of loading cargo on Saturday (today)", they added. At the same time, after a detail meeting, TCP management has decided to wait till the cargo loading report of PSIA and if loading confirmation report by the pre-shipment inspector will be received positive, then some more grace period will be given to Global Energy and Commodities Exchange for delivery of remaining quantity.
However, the deal is likely to be cancelled or scraped if loading was not confirmed by PSIA. TCP management would take final decision on the issue on Monday after receiving PSIA report, sources said. A deal for the import of 50,000 tons of urea was finalised with Global Energy and Commodities Exchange, which participated in TCP's urea import bid and agreed to supply urea at 431 dollars per ton with expected delivery in third week of February, 2012.
As per tender term and conditions, after finalising the deal, all successful bidders are required to submit their shipment plan with corporation to ensure the timely supply of commodity, accordingly the Green House on behalf of supplier also submitted shipping schedule according to which, MV DENIZ-M will start loading from Jebel Ali Port of UAE as on February 17. However, the company was failed to make shipment as per schedule and requested for relaxation in supply period.
TCP, imposing plenty of 30cent per ton per day, granted an extension of 20 days and allowed the international supplier to make shipment of 50,000 tons of urea till March 6 positively without further delay. However, again the supplier was failed to meet deadline and did not make supply as per second schedule. After availing 20 days extension, international supplier was granted another seven days for shipment with a fine of 35cent per ton per day and it has been asked to make shipment till March 15, the supplier is again failed to meet this deadline.
It may mentioned here that following the directives of the federal government, TCP is engaged to import urea on high priority basis to fill the supply and demand gap in the domestic market, which is facing acute shortage of commodity owing to gas crisis. Under the second phase of urea import, TCP finalised deals for the import of some 0.5 million tons of urea through auction with pre-qualified bidders.