Indonesia Can Provide Long-Term and Stable Urea Supply Considering Production Volume and Geographical Proximity
Significant Contribution to Diversifying Import Sources
Initial Import of 10,000 Tons Within This Year
[Asia Economy, Reporter Joo Sang-don] The Korean government has agreed to receive up to 10,000 tons of urea per month from Indonesia over the next three years.
The Ministry of Trade, Industry and Energy announced on the 7th that it signed a memorandum of understanding (MOU) with the Indonesian government containing this agreement.
The Korean government has been closely consulting with the industry to diversify import sources, as domestic urea imports have been concentrated in specific countries. Considering Indonesia’s urea production volume, maturity of economic exchanges, and geographical proximity comprehensively, it is a country capable of supplying urea to Korea in a long-term and stable manner. In particular, Indonesia has been reviewed as an important country for diversifying supply sources of vehicle-use urea.
As a result, Minister Moon Seung-wook of the Ministry of Trade, Industry and Energy signed the MOU with Minister Erick Thohir of Indonesia’s Ministry of State-Owned Enterprises to ensure the stable import of industrial urea (including vehicle-use) volumes of 10,000 tons per month over the next three years, fully considering Korea’s demand. Considering that the annual industrial urea import volume is about 370,000 tons (80,000 tons for vehicle use), this volume is expected to make a significant contribution to diversifying import sources.
Minister Moon said, "Although it is the peak season for urea in Indonesia due to the farming season, we appreciate that the governments of both countries quickly decided on urea supply in consideration of the partnership with Korea," adding, "We will strengthen supply chain cooperation based on the close relationship between Korea and Indonesia in the future."
As the first achievement of a long-term urea cooperation relationship with Indonesia, a contract was signed on the same day between Indonesia’s largest urea state-owned enterprise, PT Pupuk, and domestic companies to supply up to 10,000 tons of vehicle-use urea. The secured 10,000 tons of vehicle-use urea is enough for all domestic vehicles to use for about 1.5 months. Indonesia has agreed to supply this volume by the 20th of this month. Considering shipping and maritime transport, it is expected to be introduced domestically by the end of this month or early next year.
The government plans to promote import diversification by conducting economic and technical reviews through the private-led Urea Alliance formed on this occasion and jointly negotiating with urea producers from various countries. Currently, Vietnam and the Middle East (1-2 countries) are being reviewed as priority countries for urea import diversification, and in the future, optimal alternative countries will be selected and negotiated by usage such as vehicle and industrial purposes.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
