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Azerbaijan becomes globally strategic partner in diversifying export

24 November 2023 08:30 (UTC+04:00)
Azerbaijan becomes globally strategic partner in diversifying export

By Sara Ganjiyeva

In recent years, Azerbaijan has started to play a more active role in the world economy. At the heel of the Russo-Ukrainian War, the prices of natural gas hiked, and it triggered the rise of food products worldwide as well. As is known, the raw material of main fertilizers, such as urea, is natural gas. Soaring gas prices made fertilizers unavailable for many countries. Besides, reciprocal embargos imposed by Russia and the West on each other made the situation more drastic.

Thus, many countries have started to look for alternative suppliers and Azerbaijan has been one of the suppliers since 2019. So far, Azerbaijan has exported urea fertilizer to Turkiye, Brazil, India, Bulgaria, and so on. Recently, Pakistan has emerged with a rising interest in Azerbaijani-made urea fertilizer. Pakistan's local media outlets report that the country is holding negotiations on purchasing urea from Azerbaijan, Russia, and China as well as adding the country is facing a shortage of 200,000 metric tonnes of urea fertilizer due to the closure of local fertilizer-producing plants. Besides, the wheat sowing season increases the demand for urea fertilizer in the country.

Speaking to Azernews on the issue, Global Business Alliance CEO Muhammad Asif Noor said in his statement that the SOCAR Carbamide plant in Azerbaijan meets 90 percent of the country's nitrogen fertilizer requirement and plays a critical role in the country's agricultural and non-oil export development. He noted that Azerbaijan has been successful in negotiating fertilizer deals with other countries such as Brazil, Turkiye, Moldova, Bulgaria, and India, which further demonstrates its potential to win the negotiations with Pakistan.

“Moreover, Pakistan and Azerbaijan have expressed their commitment to deepening their bilateral relationship, as seen in their mutual support on various international issues and the completion of negotiations for a Preferential Trade Agreement. Azerbaijan's desire to expand cooperation with Pakistan in various fields, including petrochemicals, solar energy, and defense production, indicates a willingness to diversify and strengthen its economic and strategic ties. This positions Azerbaijan as the potential winner of these negotiations,” Asif Noor said.

He pointed out that Pakistan's potential long-term engagement as a customer for Azerbaijan's carbamide fertilizer is influenced by several key factors. Firstly, the pressing shortage of urea fertilizers in Pakistan, amounting to 200,000 metric tons, stems from the closure of local plants and an escalated demand during the critical wheat sowing season in December and January. He added that the ongoing negotiations with Azerbaijan, Russia, and China are dependent on Intergovernmental Agreements (G2G) and the implementation of a transparent price discovery system.

“This highlights a commitment to a fair and competitive process in determining both the supply and pricing of fertilizers. Furthermore, Pakistan's strategic decision to diversify its sources of urea fertilizers by exploring alternatives like Azerbaijan indicates a broader strategy aimed at reducing reliance on a single supplier. This approach not only addresses the immediate shortage but also aligns with diplomatic efforts to establish beneficial relationships with various countries for consistent access to essential resources. The friendly relations between Pakistan and Azerbaijan, as evidenced by their historical ties, mutual support, and strategic partnership, suggest the potential for a long-term and enduring partnership between the two countries. Both nations have expressed their commitment to deepening their bilateral relationship, as seen in their mutual support on various international issues and the completion of negotiations for a Preferential Trade Agreement" the expert opined.

He also noted that currently, there is no great cooperation between Azerbaijan and Pakistan in the field of agriculture. The purchase of urea fertilizer will be one of the first, and it is expected to be a good opportunity for cooperation.

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