ECC approves 100,000 tonnes urea import to prevent shortage

ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Friday authorised the import of 100,000 metric tons of urea through open tender which will require around $36 million. Federal Minister for Finance and Revenue Muhammad Aurangzeb chaired the meeting, focusing on this one-point agenda of the Ministry of Industries and Production to import urea to avert any possible shortage of this important agriculture input during the upcoming cropping season.

The Ministry of Industries reported ECC had previously authorised the Trading Corporation of Pakistan (TCP) to import 200,000 metric tons of urea on May 7, 2024. This decision was later ratified by the cabinet on May 14, 2024, and further detailed in a June 11, 2024 document.

TCP’s tender for 150,000 metric tons, opened on July 29, 2024, yielded the lowest bid from West Trade International at $358.99 per metric ton. However, this rate is higher than the tender rate.

Negotiations with Turkmenistan for a government-to-government deal and efforts to secure approval from China’s National Development and Reform Commission are going on.

The estimated cost for importing 157,500 metric tons of urea stands at approximately Rs18.37 billion. The landed price for a 50-kg bag of urea is projected to be Rs5,832.59, with additional incidental costs of Rs1,500/bag bringing the total to Rs7,332.59 per bag. The local prevailing price of urea is low so leading to an estimated subsidy requirement of Rs5.865 billion. The first shipment is expected to arrive at the Karachi port on August 16, 2024.

The total dollar requirement for 157,500 metric tons is $56.54 million, while $35.90 million is needed for 100,000 metric tons. The bid expires on August 3, 2024.