Fertiliser sales jump 108%, amount to 898k tons

Industry closes April with an inventory of 1.46m tons in hand

KARACHI: Fertiliser sales during March 2017 posted an increase of 108%, taking total dispatches to 898,000 tons in the first nine months of 2017, according to data released by the National Fertilizer Marketing Limited (NFML).

Engro Fertilizers Limited (EFERT) outperformed with an off-take of 95,000 tons (inclusive of 31,000 tons of exports) during the month (up 371% year-on-year) followed by Fauji Fertilizers (FFC) with 115,000 tons (up 95% year-on-year), according to a JS Research report.

The industry closed the month with an inventory of 1.46 million tons in hand.

Off-take of indigenously manufactured Di-ammonium Phosphate (DAP) of Fauji Fertilizer Bin Qasim (FFBL) posted an increase of over 200%. On the other hand, sale of imported DAP declined by 47% year-on-year.

Despite the availability of gas, the looming inventory glut has forced producers to restrict their urea output to 533,000 tons (up 3% year on year) during the month compared with 517,000 tons in same period last year, Taurus Securities reported.

The Economic Coordination Committee (ECC) has allowed a discount of further Rs200 per bag on imported urea prices, which is likely to create some pressure on the local urea off-take. However, it is unlikely that the local producers will follow suit to cut prices.

In April 2016, urea off-take is expected to depict a similar trend and it is likely to settle between 250,000-270,000 tons. The inventory glut to persist between 1.0 million-1.4 million tons unless the government allows commodity exports in excess of 300,000 tons, the report added.

Published in The Express Tribune, May 3^rd, 2017.

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