Trading Corporation of Pakistan (TCP) has opened four Letters of Credit (LCs) worth $132 million for importing 300,000 tons of urea. Sources told Business Recorder on Friday that these LCs had been opened after the deposit of 10 percent performance guarantees by four successful bidders, adding that after the opening of LCs, suppliers had also submitted details of shipments, confirming all imported consignments would reach Pakistan by the first week of October.
Following the directives of Economic Co-ordination Committee (ECC) of the Cabinet, TCP is importing 300,000 tons of urea to avoid shortages in the domestic market in the Rabi season. TCP floated an international tender on August 9 this year. In response to the TCP tender, which was opened on August 27, as many as 12 international pre-qualified bidders participated and agreed to supply the commodity in accordance with TCP”s terms and conditions.
The contract was finally awarded to four international suppliers – M/s Key Trade AG Switzerland and M/s Dreymoor Fertiliser Overseas (PTE) Ltd, M/s CHS Europe, Switzerland and M/s Transammonia AG Switzerland. All of them have agreed to supply 300,000 tons of urea at the lowest bid price of $399.38 per ton cost and freight (C&F).
In the second phase, bidders deposited performance guarantees in the first week of September. During this week, the TCP established four LCs in favour of these suppliers. Accordingly, two LCs were opened in favour M/s Key Trade AG Switzerland and M/s Dreymoor Fertiliser Overseas (PTE) Ltd for import of 100,000 tons of urea from each. While two more LCs of 50,000 tons each were established for M/s CHS Europe, Switzerland and M/s Transammonia AG Switzerland. Cumulatively, LCs worth $131.8 million have been opened by TCP.
TCP is spending more than Rs 13 billion to ensure prompt supply of the commodity. Additional funds were generated through enhancement of the corporation”s credit limit, which was exhausted during the previous commodity purchase operation. A week ago, a consortium of six banks, which regularly provides financing to TCP, was asked by the ministry of finance to immediately enhance the Corporation”s credit limit by Rs 20 billion to Rs 135 billion. Appropriate response by the ministry of finance helped the TCP to establish LCs, besides ensuring the timely import of urea, sources said.
The sources said that TCP was making all out efforts for making urea available in adequate quantities. The corporation has already imported 300,000 tons of urea to facilitate the farmers to meet their urgent need of Urea for Kharif crops. Source said that the distribution, transportation and bagging of Urea will be handled by M/s National Fertiliser Marketing Limited (NFML) to provide urea to farmers on time to meet their Rabi requirements.