Under the 15-year agreement that ends in July, India is committed to buy 2 million tonnes urea every year from the plant at an agreed price. "Now that agreement will be over, we may not enter into any further commitment if Omifco doesn’t offer a g...
“Through this agreement, India saves around Rs 1,500 crore annually. We may have to pay more after the agreement terminates,” said the official said.
NEW DELHI: The government is likely to review the long-term urea purchase pact with Omifco, a joint venture of IFFCO, KRIBHCO and Oman Oil Company.
Under the 15-year agreement that ends in July, India is committed to buy 2 million tonnes urea every year from the plant at an agreed price. India imports 6-8 million tonnes of urea every year with supplies from Omifco being the cheapest at prices ranging fro $134 to $140 a tonne when global prices were hovering between $230 and $350 a tonne.
“We have been importing urea from Omifco at less than half the global prices resulting in a big saving on our import bills. Now that agreement will be over, we may not enter into any further commitment if Omifco doesn’t offer a good price,” said a senior fertiliser ministry official.
“Through this agreement, India saves around Rs 1,500 crore annually. We may have to pay more after the agreement terminates,” said the official said.
He said the ministry will assess the global pricing of urea during that period before taking a decision as global prices have fallen due to Covid-19 crisis.
Recently, MMTC invited bids for long-term urea supply of one million tonnes per year for a minimum of three years, extendable for another two years.
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“Omifco may not offer us the existing price after the agreement is over in July. So, we will not enter into any long-term pricing commitment. We want to keep options open for sourcing the crop nutrients at economical prices,” he said.
India signs 3-year import deal with Omifco for 1MT/year of urea: Reports
