ISLAMABAD: The Federal Government has allowed Trading Corporation of Pakistan (TCP) to sign Memorandum of Understanding (MoU) with Chinese Firm M/s CNAMPGC for import of 0.2 MMT granular urea from China on G2G basis, official sources told Business Recorder.
Sharing the details, sources said, Ministry of Industries and Production noted that ECC of the Cabinet in its decision on May 15, 2022 had allowed import of 0.2 MMT of urea on G2G basis with stipulation that the procurement shall be made on deferred payment basis. The Federal Cabinet on May 17, 2022 ratified the decision.
On May 28, 2022, TCP informed the Economic Coordination Committee (ECC) of the Cabinet that pursuant to the directions of the ECC for import of 0.2 MMT urea, it had approached Chinese state owned enterprises for quotes on supply of granular urea which has offered supply of 0.2 MMT of granular urea at +ACQ-600/MT FOB for shipment in June to September 2022.
The ECC stated that the deferred payment rate that was being offered was at 4.35 percent per annum which comes to around +ACQ-2.175/MT per month. Therefore, the FOB cost would total around +ACQ-606.525/MT on a three-month deferred payment basis. It was also noted that the bid validity was till 7 pm (Chinese local time) May 29, 2022.
The ECC was also informed that if the ECC approved the proposed procurement, but due to the ban imposed on export of urea by the Chinese government, the role of Ministry of Foreign Affairs would be pivotal to ensure speedy clearances. The Chairman TCP indicated that if the Chinese government gives its consent in the coming week, landing of urea in Pakistan could commence from mid-July, 2022, given the timeframe for approvals from the Chinese government, the transportation of the cargo to port in China, loading and voyage times.
Ministry of Industries and Production requested ECC to allow TCP to import 0.2MMT granular urea from China on G2G basis on deferred payment basis and to sign MoU with counterpart Chinese agency.
After brief discussion, the ECC took the following decision: (i) TCP was authorized to sign the MoU for G2G procurement with M/s CNAMPGC and final price not exceeding +ACQ-606.525/MT FOB for 90 days deferred payment+ADs- (ii) in view of the timelines for ensuring an early arrival of urea in Pakistan and in case of no progress on further reduction attempts by TCP on prices being offered, TCP to sign the agreement with M/s CNAMPGC to procure 0.2MMT granular urea (5 percent MOLSO) from M/s CNAMPGC at FOB +ACQ-600/MT at 90 days deferred payments with an additional mark-up rate of 4.35 percent per annum, totalling +ACQ-606.525/MT+ADs- (iii) Ministry of Maritime Affairs shall ensure priority berthing for the cargo+ADs- (iv) PNSC to ship the cargo to Pakistan at the best possible rates and shortest timeframe+ADs-( v) Ministry of Foreign Affairs would ensure that the approvals from the Chinese government are solicited on priority basis to ensure arrival of the consignment in Pakistan at the earliest+ADs- and (vi) Ministry of Industries, Commerce and Foreign Affairs would ensure effective coordination for ensuring priority clearance required from the Chinese government and earliest arrival of the cargo in Pakistan. The sources said Federal Cabinet in its meeting held on May 31, 2022 has ratified the decision of the ECC taken on May 28, 2022.
Copyright Business Recorder, 2022