June data: Urea sales surge 79% ahead of subsidy cut

Demand is likely to return to normal levels in second half of 2017

KARACHI: Urea off-take stood at 1.06 million tons in June 2017, up 79% year-on-year and 103% month-on-month, according to data released by the National Fertiliser Development Centre.

“The numbers remained in line with expectations,” JS Research said in a report on Monday.

Di-ammonium phosphate (DAP) sales also came in line with expectations and were recorded at 112,000 tons, an increase of 161% year-on-year and 61% month-on-month.

The strong numbers can be attributed to depressed urea prices and buying by dealers in anticipation of rate hike after reduction in government subsidy. Sales were likely to return to normal levels in the second half of 2017, the report added.



Cumulatively, in the first six months of 2017, urea off-take showed an increase of 51% year-on-year to 2.75 million tons whereas DAP sales during the period recorded a rise of 21% year-on-year to 590,000 tons.

The industry ended June with an inventory of 1.08 million tons, down 35% year-on-year. Inventory levels are expected to pick up again as Kharif sowing season is going to a close. In June 2017, Fatima Fertilizer remained the star performer with urea sales of 152,000 tons, up 426% year-on-year and 107% month-on-month, followed by Engro Fertilizers with sales of 318,000 tons, up 168% year-on-year and 129% month-on-month.

Exports continued in June as well as all mainstream manufacturers - Fauji Fertilizer Company, Fatima Fertilizer and Engro Fertilizers exported 5,000 tons, 7,000 tons and 43,000 tons respectively.

Going forward, exports would continue, albeit at a slow pace, keeping current export market dynamics into consideration, it added.

Published in The Express Tribune, July 25^th, 2017.

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