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ISLAMABAD: The Trading Corporation of Pakistan (TCP) is reportedly in talks with Russian company M/s Uralchem for the import of 0.2 million tons of urea for Rabi season, well-informed sources told Business Recorder.

Sharing the details, sources said, Pakistan’s usual choice is China; however, the Chinese government has imposed export restrictions on phosphatic and nitrogenous fertilisers for the next 60 days and thus, will not entertain Pakistan’s demand.

The second option, sources said, is Azerbaijan; however, M/s SOCAR only produces 50-60,000MT of urea per month, half of which is already committed to European markets through the Black Sea. Going for that option will certainly not be cheap as Black Sea prices are high and there is no guarantee of product being delivered by the January 13, 2023 window.

Urea talks continue with Russia, China, Azerbaijan

“The most likely option that the government is inclined towards is Russia. International market rumours indicate that TCP is in private negotiations with a private company called Uralchem owned by private individuals, Dmitry Mazepin and Dmitry Tatyanin,” the sources added.

However, it is unclear how such negotiations can fall under the category of G2G business. In addition, due to transit times from Russia not less than 60 days it is very unlikely that Pakistan can receive the product in time to avoid fertiliser shortage.

Pakistan has received the lowest bids in any government tender in the last six months. Indian Potash Limited closed a tender one month ago at 410$/MT CFR West Coast and East Coast India for a volume of 1.5 Million MT. Ethiopian Agricultural Business Corporation also closed a tender for 562,000MT with the lowest offers averaging around USD380/ MT FOB Egypt which would translate to 415$/ MT CFR Karachi or higher.

Pakistan’s demand is only 200,000MT and considering the country’s financial situation it is impressive that TCP tender fetched bids below 390$/MT CFR Karachi/Gwadar and that too on 60 days’ credit terms with origins that are in close proximity to Karachi.

Local tender participants are of the view that the government should decide in the best interest of the country to avoid any shortages in the forthcoming Rabi season.

Copyright Business Recorder, 2023

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