Pakistan’s locally produced urea fertilizer sales declined 13% to 503,000 tonnes in February 2023 compared with sales recorded in the same month last year. The dip in urea offtakes is mainly attributable to lower urea production by RLNG-based plants due to unavailability of feed gas.
Similarly, on MoM basis, urea offtakes declined by 24%, owing to seasonality impact and lower imported urea offtakes.
On the flipside, DAP sales posted an increase of 76% YoY to clock in at 98,000 tonnes vs. 55,000 tonnes last year. The increase in DAP offtakes is attributable to low base effect. On MoM basis, DAP offtakes increased by 2%. Similarly, NP and NPK offtakes clocked in at 95,000 tonnes and 11,000 tonnes witnessing an uptick of 47% & 29% YoY, respectively.
Analysts believe that after conclusion of Rabi season, industry will have sufficient supply of urea to cater demand during Kharif as RLNG-based plants have also became operational, however, in worst-case scenario of non-availability of gas to these plants, NFDC estimates shortfall of at least ~450kt which is expected to be full filled by urea imports to ensure smooth supply.
Engro Fertilizer (EFERT) offtakes increased by 10% YoY to clock in at 187, 000 tonnes, despite unplanned shut-down of base plant for 7 days.
On the flipside, Fauji Fertilizer company (FFC)’s offtakes during the month clocked in at 201, 000 tonnes vs. 212, 000 tonnes in SPLY, down by 5% YoY.
Furthermore, Fatima Fertilizer, Agritech Limited (AGL) & Fauji Fertilizer Bin Qasim (FFBL) witnessed a decline of 40%, 97% & 31% YoY, respectively.
Urea fertilizer closing inventory clocked in at 54, 000 tonnes down by 47% MoM due to lower production led by unavailability of gas to RLNG plants. To note, during the month, imported urea sales clocked in at 48, 000 tonnes vs. 142, 000 tonnes in Jan’23, taking closing inventory of imported urea to 27, 000 tonnes. Whereas, total industry’s closing inventory of urea marked 54, 000 tonnes which is 12 month low.
During Feb’23, DAP offtakes clocked in at 98, 000 tonnes vs. 55, 000 tonnes in SPLY, recording an increase of 76% YoY.
The growth in offtakes is attributable to lower base effect. International DAP prices were US$650/ton in Feb’23, down by 21% YoY from US$828/ton in SPLY.
However, most impact of lower international prices is offset by PKR devaluation in the country, therefore, local prices are hovering around PKR 10,434/bag (NFDC), up by 12% as compared to SPLY.
FFBL’s DAP offtakes clocked in at 51, 000 tonnes during the month, up by 3.4x YoY. Industry carried DAP inventory of 263, 000 tonnes at the end of Feb’23, down by 24% MoM.
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