Fertiliser: DAP prices continue to soar, Rs100 this time

Local companies taking cue from international market.

KARACHI: Prices of di-ammonium phosphate (DAP) reached Rs3,100 per bag on Thursday, after an increase of Rs100 per bag. Fauji Fertiliser Company Limited and Engro Fertiliser Limited have both raised prices, citing increases in the international market for DAP and phosphoric acid. Earlier, local manufacturers had raised urea prices claiming that the gas curtailment had driven up costs.

Fertiliser prices have consistently shown a rising trend for over a year now. Fertiliser sector analyst Farhan Bashir Khan said that during 2010, urea prices increased by 11 per cent while DAP prices surged by 32 per cent.

However, the analyst asserted that this trend may subside in coming months. “Urea prices are expected to sustain some pressure internationally amid floods in Australia and narrowed demand,” said Khan.

While acknowledging that demand for DAP has remained resilient in the face of rising prices, the analyst contended that international supplies are expected to improve in coming months. Higher international supplies of DAP are expected to hit markets by the time demand of Rabi season peaks in the country.

However, analysts are not ruling out higher demand from local farmers who are eager to recover from losses suffered due to recent floods.

Published in The Express Tribune, January 28^th,  2011.