Urea sales fall 21% as sowing slows down

In January 2019, total urea sales stood at 564,000 tons

KARACHI: Urea fertiliser sales dropped 21% on a month-on-month basis in January 2019, driven down by the seasonal effect as crop cultivation slowed down in the month compared to December 2018.

On a year-on-year basis, fertiliser sales, however, rose 5% to 564,000 tons compared to January 2018.

“Demand for fertiliser for new crop plantations is always high in December as compared to January, when sowing slows down,” remarked Mahmood Nawaz Shah, an office-bearer of the Sindh Abadgar Board and CEO of Shah Agricultural Products.

Company-wise, urea sales of Fauji Fertiliser Company (FFC), Fauji Fertiliser Bin Qasim Limited (FFBL) and Engro Fertilisers decreased 12%, 80% and 39% respectively. “FFBL’s production dropped sharply because its plant remained shut for annual maintenance,” said Shankar Telreja, an analyst at Topline Securities.

However, sales of Fatima Fertiliser rose 100% on a yearly basis mainly on the back of resumption of production by Dawood Hercules, according to Taurus Securities.

In the case of di-ammonium phosphate (DAP), domestic sales of Engro Fertilisers rose 1.12 times year-on-year whereas sales of FFC and FFBL declined 80% and 64% respectively.

On a monthly basis, the urea inventory came down 59% to 71,000 tons, which included 11,000 tons of imported urea with National Fertiliser Marketing Limited (NFML), said Taurus Securities. DAP stocks stood at 488,000 tons.

“Fertiliser demand varies according to the emerging situation in Pakistan’s agriculture sector,” said Shah. “This is the wheat harvesting season, which is being collected in isolated areas. By the second week of March, its pace will increase.”

In April and May every year, new crop sowing begins, which is expected to give a boost to fertiliser offtake in the next couple of months. However, the country is facing water shortage and in the last sowing season farmers got water supply late, which resulted in delayed cultivation of different crops. 

Published in The Express Tribune, February 26^th, 2019.

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