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FACT seeks bids for supply of 120,000 tonnes of ammonia

Sept 15: Fertilisers and Chemicals Travancore Limited (FACT) has invited tenders for delivery of 120,000 tonnes of anhydrous ammonia at Kochi for manufacture of fertilizers.
8According to the tender document, “FACT intends to import about 1,20,000 MT of Ammonia in shipments of 7500MT+/-5% each for a period of 6 months from the date of award of contract. The contract is extendable up to one year at FACT’s option. The shipment schedule depends upon factors such as ullage at cochin port, movement from Cochin port to plants etc.”
8The tender document says: “FACT intends to avail credit up to 180 days from the B/L date. Bidders shall offer credit up to 180 days and indicate the applicable rate of premium for the credit period of 180 days per annum in the Price Bid Format. In case the bidder has not offered 180 days credit or has offered credit for a period shorter than 180 days, a premium @ 14% per annum for the balance period up to 180 days shall also be loaded for evaluation.”
8It adds: “Shipment schedule will be as per indication to be furnished to the supplier considering ullage at Cochin port, Movement from Cochin port to plants etc. Supplier has to arrange delivery of the material at Cochin Port within 30 days from the date of confirmation by FACT as per arrival laycan at Cochin.”
8The last date for submission of tenders is 22nd September 2014.

MP's Markfed invites tenders for supply of eight fertilizers during Rabi

Sept 15: The Madhya Pradesh State Cooperative Marketing Federation Ltd (Markfed) is seeking offers for supply of four commodity fertilizers and four grades of NPK fertilizers during the forthcoming Rabi season beginning 1 October 2014 and ending 31st march 2015.
8The four bulk fertilizers and their requisite quantities are: 350,000 tonnes of diammonium phosphate, 300,000 tonnes of single superphosphate and 30,000 tonnes of muriate of potash and 3000 tonnes of ammonium sulphate.
8As for complex fertilizers, Marfed has asked for 80,000 tonnnes of NPK (12.32.16) grade., 30,000 tonnes of NPK (10.26.26) grade and 15,000 tonnes of two other grades combined.
8The bidders are required to submit separate offer for each product. The last date for submission of offers is 23rd September 2014.

DOF seeks EOIs for Barcode-based tracking of all fertilizer bags

Sept 12: The Department of Fertilizers (DOF) has invited Expression of Interest (EoI) from eligible entities for implementation of barcode-based Fertilizer Track & Trace Solution (FTTS) to prevent subsidy leakages.
8At present, 100 crore fertilizer bags each weighing 50 kg pass through the supply chain every year. The supply chain includes 1.5 lakh retail outlets.
8As put by EOI document, “DoF envisages a tracking system where each bag of fertilizer supplied, which is eligible for government subsidy, can be traced across the supply chain points. The subsidy to be paid by the government will be linked with the scanning of fertilizer bag at wholesalers/retailer end. This would introduce transparency in fertilizer chain by near real-time data flow related to fertilizer bags dispatched, traced at intermediate check points and finally tracking the bag till the end point of sale. Each fertilizer bag will be tagged with a barcode at the manufacturing site/port. The fertilizer bag then will be scanned at certain number of pre-defined locations during the movement from plant/port to the retailer’s outlet. These locations may include manufacturers/port dispatch point, district warehouse, wholesaler’s and retailer’s receipt & sales point (s).”
8The information pertaining to the bag’s movement would need to be steamed to a centralized application.
8The tracking of fertilizer bags with Barcode based Supply Chain Management System ( FSCTS) project is envisaged to be implemented on BOOT (Build, Own, Operate, Transfer) basis initially for a period of 5 years extendable up to another 2 years.
8During the BOOT period, the successful bidder will own and operate the FSCTS and will be paid for the services based on the last mile receipt / sale of each fertilizer bag.
8At the end of the BOOT period, the successful bidder must transfer the complete infrastructure of FSCTS, including the hardware, software, barcode scanners and data centre infrastructure, at the notional cost of Rs 1 to DoF in order to keep the implemented system fully operational.
8DOF says: “Implementation of FSCTS will help DoF to estimate the availability of fertilizers at each sale point and enable DoF for better planning and movement of the fertilizers to the state / districts.
8FSCTS would also be able to check leakages and pilferages of fertilizers to non-agricultural sectors by providing real-time abnormal sales reports with certain retailers, it adds.

RCF seeks offers for undertaking bentonite sulphur market study

Sept 12: Rashtriya Chemicals and Fertilisers Limited (RCF) has invited bids from consultancy firms for carrying out an all-India market study on bentonite sulphur.
8The proposed study would estimate demand for this fertilizer across the country over the next five years. This data would include import projectionsfor the period. It would review manufacturing hubs in different regions and compare product prices of different companies.
8The study would also provide data on actual demand for bentonite sulphur during the last five years ending 2013-14 as well provide data on actual imports. It would identify the distribution channels for supply of bentonite sulphur to customers. The consultancy firm is also required to give regionwise consumption of sulphur as fertilizer product.

MMTC solicits offers for urea supply for meeting Rabi?s demand

Sept 11: MMTC Limited has invited tenders for import of unspecified quantity of urea for shipments from load ports latest by 10th November 2014 keeping in view Rabi season’s requirements.
8The company says that bidders should ensure that quantities offered against the tender are shipped on evenly spread basis over the entire period of shipment to avoid bunching at the 16 discharge ports mentioned in the tender document.
8According to the tender document, “Bidders must clearly indicate specific quantity offered for arrival as indicated above. Bidders are also required to furnish specific tonnage offered from each port of shipment indicated by them. Such quantities shall be clearly mentioned as “firm quantities”. Offers mentioning ‘suppliers’ option’ are liable to be rejected.”
8The tender document says: “Marine insurance (for other than Iranian Origin cargo) shall be arranged by MMTC. Marine insurance for Iranian origin cargo shall be arranged by supplier at their own cost. MMTC and / or its receivers reserve the right to appoint any reputed independent inspection agency at discharge port for determining quality and quantity, whose report shall be treated as final.”
8It adds: “Offers may be made on both FOBT and C&FFO basis in US Dollars or on FOBT basis alone (indicating the name of the loading port with facilities available and restrictions, if any) per Metric Tonne of Urea for payment against L/C…. While submitting offers on both FOBT and C&F FO, firm freight from loading port to discharging port in India must also be quoted separately. 8Bidders are requested to make price offers on Per Metric Tonne basis in US Dollars on cash basis. MMTC reserves the right to reject such offers which are made only on C&F FO basis. For Iranian origin cargo, prices quoted (should) be in AED only and marine Insurance has to be arranged by suppliers at their own cost.”

RCF gears up for potash imports

Sept 11: Rashtriya Chemicals and Fertilisers Limited (RCF) has invited bids for supply of 60,000 tonnes of muriate of potash (MOP) at Mumbai port.
8RCF has proposed to buy half of the sought quantity on firm basis and the balance half at its own option.
8The firm requirement of 30,000 tonnes is to be delivered by the winning bidder in during November 2014. The second parcel, in case the option is exercised by RCF, would have to be delivered during February-March 2015.
8The contract will be operated on FOB basis and the vessels shall be chartered through Transchart. In case of non-availability of vessels through Transchart, the contract shall be operated on CFR basis after obtaining NOC by RCF from Transchart, on shipment-to-shipment basis.
8As in the previous cases, the tender document has stated that “RCF reserves the right to re-export the MOP procured, to any buyer in the neighboring countries at its sole discretion.”
The last date for submission of bids is 22nd September 2014.

DOF issues fresh advisory on analysis of Egyptian rock phosphate

Sept 11: The Department of Fertilizers (DOF) has issued fresh guidelines for mandatory testing of Egyptian rock phosphate imported by single super phosphate (SSP).
8In a letter dated 10th September addressed to all SSP units, DOF says: “all the SSP units under the NBS scheme are advised to make a reference to PDIL/FEDO for carrying out analysis of each consignment of Egyptian rock phosphate imported prior to two months from date of this letter under intimation to this Department.”

Point Counter Point-I: AOGO lobbies hard for gas price increase

Sept 11: The pitch is going up for a gas price increase.
8The Association of Oil and Gas Operators (AOGO), an umbrella body of E&P companies in India, is lobbying hard for a gas price hike as recommended by the Rangarajan Committee. The Association has shot off a letter to the "Committee of Secretaries for Gas Price" where it has made the following points:
8All decisions need to be taken within the four corners of the Production Sharing Contract (PSC)
8Any country looking for private sector participation to explore its vast unexplored basins need to maintain the sanctity of the contract
8Need of the hour is to raise domestic production which can only be facilitated by switching to a market-price mechanism
8An artificially fixed intermediate-level pricing regime divorced from the market suffers from serious setbacks
8Lower domestic production will keep the country`s fiscal system and energy security under stress
8A higher gas price in no way conflicts with social obligations
8A higher gas price will lead to an increase in domestic production resulting in a higher GDP growth
8Globally, all economies are moving towards freer market prices.

Point Counter Point-II: Price hike will lead to $50 billion investment, says AOGO

Sept 11: Among the other points made by the Association of Oil and Gas Operators (AOGO) in their letter to the Committee of Secretaries (COS) seeking a hike in gas price, include:
8Right price signal will immediately result in development of atleast 9-10 TCF of gas reserves resulting in investment of around $30-40 billion
8Increased government revenue will help offset subsidies
8The greater the activity in E&P, the better the prospects for a growth of competent and skilled services
8If full import price parity is given to crude oil then natural gas should not be left out
8Subsidies on petroleum products far outstrip subsidies on account of gas
8Cost-plus pricing model is not practical for gas because of a host of unforeseen uncertainties
8Gas price reforms in other countries (details)
8Misconceptions on the Rangarajan formula for pricing of gas

Point Counter Point-III: Fertilizer lobby orchestrates campaign against gas price hike

Sept 11: Even as the AOGO has launched a well orchestrated campaign for a gas price hike before the "Committee of Secretaries for Gas Price", the powerful and highly connected Fertilizer Association of India -- made up of large urea manufacturers -- has embarked on a counter campaign.
The campaign is structured on the following arguments:
8High price will destroy demand
8Present price Compares well with other countries
8Serious flows in in the Gas Pricing Guidelines 2014
8Existing price formula should be retained
8Multiple prices are needed in India
8Regulator required to administer gas Price
8Maintaining current price will not increase LNG Imports
Click on Details for the arguments advanced by the FAI under each of the above heads

Point Counter Point-IV: Rangarajan formula faulty, says FAI

Sept 11: The FAI has found the following problems in Rangarajan gas price formula:
8The formula is complex, requiring enormous data collection. Every quarter, the MoPNG will have to calculate netbacks for about 250 cargoes LNG imported by Japan, and obtain Gas consumption data from more than 30 countries in European Union, Former Soviet Union and North America. Issues of interpretation will arise, and errors can creep in, which will cause disputes between sellers and buyers.
8The formula requires gas consumed in FSU to be valued at UK's NBP rates, (about $ 9 / mmbtu), even though the wholesale selling prices in 2013 were much lower in major constituents of the FSU, viz Russia $ 3.3/ mmbtu, Turkmenstan 0.03, Uzbekistan 1.62 and Kazakhstan 3.61 (source: International Gas Union). These countries are major producers of gas, and consumed about 492 BCM in 2013, which is more than Europe (408 BCM), according to BP's latest Energy Review. The formula over values gas in FSU.
8European Union imports large quantities of gas (397 BCM) by long distance pipelines, with large transmission costs. But these costs are not subtracted to get producer netbacks. Again, EU imported 51.5 BCM of LNG, on which producer netback is not calculated and this quantity will rise in future. Again, the European part is over-estimated.
8The netback calculated from LNG leads to a number around $ 10/ mmbtu, which is much more than the domestic price of gas in Qatar (about $ 2) and Australia (about $ 5). The intention of the formula is to give domestic gas producers in India a fair price similar to what other producers get for selling in their domestic market. The premium that others get on export need not be included.
8The domestic gas price is arrived at by taking a simple average between the "World" price and India import netback price. This gives as much weightage to Indian imports (just 18 BCM) as to the much larger "World"' consumption (2, 107 BCM). In effect, this method ensures that LNG netback price will have at least 50% weightage in the domestic gas price, and raises it substantially.

DCA calls for policy intervention for mandatory use of organic manure

Sept 10: The Union Department of Agriculture and Cooperation (DCA) has pitched for mandatory use of organic manures and recycling of biomass/crop residues by farmers “through policy support and incentivization.”
8In the background notes prepared the two-day National Conference on Agriculture for Rabi Campaign-2014 beginning in New Delhi on 17th September, DCA observes: “With the growing awareness about soil health, a lot of efforts have been made to ensure balanced use of fertilizers, increased use of secondary and micronutrients and arresting chemical problems with soil amendments such as lime, basic slag and gypsum. But practically no serious efforts have been made to ensure biomass recycling, increased organic manure use and microbial life restoration. Organic interventions/ practices are largely perceived as on-farm activity and farmer has been left with just advices to manage the biomass recycling on his own.”
8DCA says that non-application of organic manures or no recycling of on-farm biomass has resulted into fast degradation of organic carbon. Even the carbon which was present in stable humic fraction has seen a steep decline over the past two decades. This has also resulted into loss of microflora and fauna. Declining organic matter, microbial activity and imbalances in microbial profile have reduced the soil biological reactions, soil buffering potential and microbial solubilization potential of nutrients, leading to faster fixation of phosphorus and micro-nutrients.
8It adds: Poor organic matter and declining microbial life have also resulted into loss of soil particle aggregation potential resulting in soil compaction, reduced water holding capacity, low aeration.”

Sept 9: GNFC to double up its debt raising limit to Rs 8000 cr to fund projects   Details
Sept 9: GNFC discontinues CAN prod; increases coal uptake to improve its profit   Details
Sept 8: CFCL restarts urea unit that was shut down on 26th August   Details
Sept 8: MMTC seeks tenders for supply of 30,000 tonnes of APS complex fert   Details
Sept 5: DAC clears 5 new customized fertilizer grades; sets soil health card targets   Details
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