Urea sales increase 5% to 2.87m tons in H1

Farmers buy fertiliser ahead of expected price hike


​ Our Correspondent July 26, 2019
PHOTO: EXPRESS

KARACHI: Sales of urea increased 5% to 2.87 million tons in six months ended June 30, 2019 as farmers purchased the fertiliser in advance ahead of likely increase in prices.

“Urea offtake depicted growth on the back of pre-buying by dealers/farmers amid expected hike in prices as the government was set to increase gas tariffs with effect from July 2019,” Topline Securities’ analyst Sunny Kumar said in a report on Thursday.

Furthermore, timely rainfall across the country - which is beneficial for crops - also pushed up volumetric sales of urea, he said.

Urea sales rise 19% in March 2019

Among domestic producers, sales of Engro Fertilisers, however, dropped 10% to 897,000 tons in Jan-June 2019 compared to 994,000 tons in the corresponding period of last year.

Overall, urea production increased 13% during the half year under review “due to resumption of production by Fatima Fertiliser and Agritech, cumulatively contributing 393,000 tons in 1H2019 compared to zero output in 1H2018,” he said.

“The industry’s urea inventory for 1H2019 closed at 178,000 tons,” he said.

Company-wise sales

Sales of urea by companies listed at the Pakistan Stock Exchange (PSX), however, declined.

Engro Fertilisers recorded a drop of around 10% in urea sales in Jan-Jun 2019. The drop may be attributed to decrease in its inventory at the start of 2019. “The company carried (urea) inventory of 10,000 tons at the start of 2019 compared to 184,000 in January 2018,” he said.

Similarly, sales of Fauji Fertiliser Bin Qasim Limited (FFBL) and Fauji Fertiliser Company (FFC) decreased 16% and 4% respectively.

Other companies, which were not listed at the PSX, saw 79% rise in urea sales from 248,000 tons last year to 443,000 tons this year.

DAP sales drop

Total sales of di-ammonium phosphate (DAP) fertiliser declined 16% to 572,000 tons in 1H2019 “due to increase in DAP prices by over 20%”, he said.

“The largest fall of 55% was seen in sales of Fauji Fertiliser which dropped to 83,000 tons. It was followed by Fauji Fertiliser Bin Qasim, down 3% to 202,000 tons. Engro, however, recorded an increase of 6% in DAP volumes to 185,000 tons,” he added.

“Key risks for the fertiliser sector include unfavourable settlement of gas infrastructure development cess (GIDC) issue, poor crop season and increase in gas prices above…expectations,” the analyst added.

Published in The Express Tribune, July 26th, 2019.

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