Favourable outlook: Fertiliser sales in November jump 20% year-on-year

Recovery comes with arrival of Rabi season coupled with support from subsidy package

KARACHI: Total fertiliser sales jumped to 1.58 million tons in November 2016 compared with 1.32 million tons in the same month of the previous year (up 20% year-on-year and 68% month-on-month), according to figures released by the National Fertilizer Development Centre (NFDC).

Following its previous month performance, fertiliser off-take remained promising in November 2016 as well on the arrival of Rabi season coupled with continued support from the subsidy package announced in the budget for fiscal year 2017.



After declining significantly during the first five months of calendar year 2016 (5MCY16), down 32% year on year, fertiliser off-take recovered well rising 28% year-on-year during June 2016 to November 2016.

Similarly, urea sales have also increased by 23% year-on-year and 110% on month-on-month to 764,000 tons in November 2016.

On a cumulative basis, total fertiliser sales posted a growth of 3% year-on-year to 7.83 million tons during eleven months of calendar year 2016 (11MCY16), while urea off-take stood at 4.59 million tons (down 4% year-on-year).

On arrival of Rabi season, Di-ammonium phosphate (DAP) sales continue to show great strength in November 2016, registering an increase of 17% year-on-year and 32% month-on-month to 631,000 tons, of which imported DAP off-take amounted to 421,000 tons (up 10% year-on-year and 61% month-on-month).

According to AKD Research, near-term checkpoints for the fertiliser industry remain in the form of; Rabi season to continue driving demand, favourable ruling from Sindh High Court (SHC) against Gas Infrastructure Development Cess (GIDC) imposition, international pricing dynamics (urea prices rebounded to $235 per ton in December 2016) and decision on export of excess urea inventory.

Published in The Express Tribune, December 29^th, 2016.

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