Fertiliser sales rise five per cent in February

Urea production could not improve significantly: analyst.

KARACHI:

The fertiliser sector recorded a sales growth of five per cent in February, compared with a month earlier, as demand stayed strong despite an increase in prices of the commodity.

Sales of urea, a type of fertiliser, rose by five per cent, indicating that the price increase of Rs190 per bag in December 2010 was being absorbed, according to InvestCap.

The increase was massively aided by sales of imported fertilisers as these jumped 39 per cent, said InvestCap analyst Asad Siddiqui.

Sales of di-ammonia phosphate (DAP), another type of fertiliser, increased 17 per cent in February on a monthly basis as farmers planned to bid adieu to the current Rabi season.

This increase highlighted that dealers were running out of inventories in January which resulted in a fresh demand for DAP in February, said Siddiqui.

Production on the increase

The fertiliser industry recorded an increase of 13 per cent to 57,000 tons in production during February. The major contributor to this increase was Fauji Fertiliser Bin Qasim Limited (FFBL), as its DAP production doubled during the month.

Furthermore, production of Nitro Phosphate (NP) was up by a mammoth 478 per cent on a monthly basis due to production resuming from Pak-Arab Fertilisers while production of Nitrogen Phosphorous Potassium (NPK) fertiliser was up by an impressive 187 per cent owing to increase in production by Engro Fertilisers.

Urea, the most widely used fertiliser, was not able to post impressive improvements in production due to gas curtailment to the sector, said Siddiqui. Urea production only improved by a meagre three per cent in February.

However, improvement is expected in production and sales as gas curtailment eases, said Siddiqui.

Published in The Express Tribune, March 29^th, 2011.