Pakistani urea manufacturers have asked the government to extend the urea export deadline until December 2017 to be able to get rid of their surplus production. “We urged the government to extend the deadline in April, but they haven’t responded,” Engro Fertilizers Limited CEO Ruhail Mohammed said in a company statement today.
The government had allowed local manufacturers to export 300,000 tons of urea by the end of April 2017. At the end of the first quarter of calendar year 2017, only Engro Fertilizers had exported the urea to Eastern Africa region at an estimated Freight on Board (FOB) price of $230-240 per ton.
Local producers are looking at export opportunities in various regions including East Africa, Afghanistan and India amongst others. The international urea prices are expected to remain under pressure after a short-lived relief at the beginning of the year due to increase in demand from North America ahead of corn season in the region, according to a Taurus Securities report.
“There is no reason to panic if the government allows the export of 500,000 tons to 600,000 tons of surplus urea. At present, the industry has an inventory of about 1.5 million tons of urea,” said Ruhail Mohammed.
He added that the urea demand is expected to remain similar to last year or around 5.5-5.6 million tons by the end of this year. Farmer economics improved in 2016 compared to 2015 and the situation is expected to remain the same in 2017 which would keep the urea demand flat, he added.