Urea PHOTO: REUTERS
KARACHI: Urea off-take increased 42% year-on-year in February 2018 to touch 365,000 tons, despite decreasing 32% month-on-month, according to sales data released by the National Fertiliser Development Centre (NFDC).
Lower sales on a monthly basis were on account of high base effect of January 2018, said Arif Habib Limited (AHL) Research in a report on Thursday.
Cumulative urea sales of Fauji Fertilizer Company (FFC) and Fauji Fertilizer Bin Qasim (FFBL) recorded 42% year-on-year increase but decreased 24% month-on-month to 179,000 tons in February 2018. Likewise, sales of Engro Fertilizers surged 41% year-on-year while declining 47% month-on-month to stand at 139,000 tons.
Fatima Fertilizer Company Limited’s sales showed 50% year-on-year and 6% month-on-month jump to reach 39,000 tons. On the other hand, no off-take was recorded for the National Fertilizer Marketing Limited (NFML).
On a cumulative basis, urea off-take posted a significant growth of 36% year-on-year in the first two months of the current calendar year. Company-wise data reveals that Engro Fertilizers outperformed its peers with a stunning 95% year-on-year increase in sales in the two months of 2018.
Sales of di-ammonium phosphate (DAP) continued with the positive momentum as demand picked up 6% year-on-year and 13% month-on-month to 104,000 tons in February 2018. Furthermore, in the first two months (Jan and Feb), DAP sales exhibited a solid growth of 23% year-on-year to stand at 196,000 tons.
Sales of FFBL and FFC came in at 81,000 tons in February 2018, translating into a massive jump of 132% year-on-year and 160% month-on-month.
Engro’s DAP sales registered 24% year-on-year and 44% month-on-month decline to 9,000 tons during the month.
Closing inventory for urea with domestic producers as of March 1 stood at 344,000 tons. Moreover, closing inventory of DAP was estimated at 239,000 tons, of which FFBL, FFC and Engro hold approximately 20,000, 32,000 and 28,000 tons respectively.
With lower urea inventory levels and expected increase in demand in the upcoming Kharif sowing season, the pricing power of manufacturers will be regained and eventually urea prices will be maximised in the current year.
“Our top pick remains Engro Fertilizers with target price of Rs77 per share,” said AHL Research.
Published in The Express Tribune, March 9th, 2018.
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