KARACHI: As the Kharif sowing season is in full swing, urea sales jumped 103% to 593,000 tons in May 2019 against 292,000 in April 2019, according to data released by the National Fertiliser Development Corporation (NFDC).
“Fertiliser sales displayed a positive trend due to the Kharif season (April to September), which will also remain high in coming months,” said Aba Ali Habib Securities’ research analyst Zubair Jatoi.
On a year-on-year basis, the fertiliser sales recorded a 20% increase over May 2018. In first five months of the current calendar year 2019, urea sales grew 6%.
Diammonium phosphate (DAP) registered the highest-ever sales growth of 147% at 213,000 tons in May 2019 against 86,000 tons in April 2019. Year-on-year, DAP sales rose 263% in May 2019 against the same month of previous year. However, in the first five months, DAP sales inched down 1%. Company-wise, Fauji Fertiliser Company (FFC) achieved the highest monthly growth of 206% in urea sales, followed by Fauji Fertiliser Bin Qasim Limited (FFBL) posting month-on-month growth of 178% and Fatima Fertiliser with 143% rise.
On the contrary, urea sales of Engro Fertilisers stood static at 141,000 tons in May 2019 over the previous month.
“Benefiting from seasonality, the overall fertiliser sector posted a positive growth in DAP sales,” Jatoi said.
The largest month-on-month surge in DAP sales of 638% was enjoyed by FFC, followed by 316% for Engro Fertilisers, 202% for FFBL and 55% for Fatima Fertiliser.
In the urea segment, FFC remained the market leader, contributing 46% of industry sales in the month under review, followed by Engro Fertilisers at 24%, FFBL at 13% and Fatima Fertiliser 6%.
In the DAP segment, FFBL emerged as the market leader, having 36% share in industry sales, followed by Engro Fertilisers at 28%, FFC 16% and Fatima Fertiliser 2%.
“The sector shows signs of growth in the near future, but demand may weaken if fertiliser producers decide to pass the impact of gas tariff hike on to consumers,” said the analyst.
The Oil and Gas Regulatory Authority (Ogra) has proposed 31% and 20% across-the-board increase in gas sale prices for all categories of consumers of Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company (SSGC) respectively, except for the domestic sector.
Published in The Express Tribune, June 27th, 2019.