Urea sales likely to record 4% YoY increase

Could clock in at 538,000 tons during August, Topline Securities states.

KARACHI:

On the back of higher imports, urea sales in the current month are likely to clock in at 538,000 tons, which would depict an increase of 11% month-on-month (MoM) and a 4% rise year-on-year (YoY), Topline Securities reported on Friday.

Moreover, urea sales through local producers may be recorded at 427,000 tons in August, up 2% MoM but down 9% YoY.

However, on a cumulative basis, urea sales from January to August in the current year would remain at 3.6 million tons, down 2.9%, added the report. By the end of August 2014, industry urea inventory is estimated at 380,000 tons, of which nearly 68% rests with the National Fertilizer Marketing Limited (NFML).

In August 2014, urea off-take of Fauji Fertilizer (FFC) is estimated at 243,000 tons compared to 203,000 in July 2014, up 20% MoM and 5% YoY.

In 8MCY14, FFC sales are likely to remain at 1.7 million tons, down 2%.

In August 2014, Engro Fertilizer urea sales may stand around 136,000 tons versus 155,000 tons in July 2014, down 12% MoM and 16% YoY.

In 8MCY14, Engro Fertilizer sales are estimated to remain at 1.1 million tons, up 26%. The improvement is mainly linked to higher production due to improved gas supply to the company from the Mari network.

Industry urea sales during the 8MCY14 are likely to stand at 3.6 million tons, down 2.9% YoY. The decline is mainly triggered by low imported urea off-take of 474,000 tons (down 25%) while Agritech’s (AGL) sales of 16,000 tons (down 89%).

Despite low AGL sales, local industry urea sales may actually increase 1.6% to 3.1 million tons in 8MCY14 on the back of improved Engro Fertilizer operating levels.

Published in The Express Tribune, August 30^th, 2014.

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