IFA ’12: Pakistan buys 100,000 tonnes of urea at $522.86/tonne

22 May 2012 07:11  [Source: ICIS news]

DOHA, Qatar (ICIS)--Trading Corporation of Pakistan (TCP) has bought 100,000 tonnes of urea under its 21 May purchase tender, market sources said late on Monday.

Speaking on the sidelines of the International Fertilizer Industry Association (IFA) conference in Doha, Qatar, market sources said the tender had been awarded to trader Gavilon, which submitted the lowest offer at $522.86/tonne (€407.83/tonne) CFR (cost and freight).

TCP was expected to purchase 300,000 tonnes of urea in its 21 May tender. It remains unclear whether TCP will make any other awards under the tender.

There had been some expectations that TCP would only buy small volumes under the tender, as Pakistani producers are holding more than 800,000 tonnes in stocks and had asked the government to purchase from them rather than the international market.

The price at which TCP’s tender was awarded is below recent business agreed in India at $535-540/tonne CFR, whereas Pakistan prices are normally at a premium to India’s.

However, there is a weakening tendency in the market at present as upcoming demand is not deemed sufficient to support current price levels.

The price in Pakistan reflects a netback of $475/tonne FOB (free on board) Yuzhny, while last reported business took place at $495/tonne FOB. However, there are expectations that Yuzhny prices will now move down, a market source said.

The IFA conference runs from 20-23 May.

($1 = €0.78)

By: Rebecca Clarke
+44 20 8652 3214

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