DAP fertiliser sales surge 31%, urea stagnates

Brokerage house reveals offtake trends, highlighting divergence in fertiliser preferences

LAHORE:

In the agricultural landscape of Pakistan, the fertiliser sector is experiencing a notable shift as Diammonium Phosphates (DAP) takes the lead with a significant surge of 31% in offtake during the Calendar Year 2023. In contrast, urea, a staple fertiliser for farmers, has seen marginal growth, remaining virtually stagnant over the same period.

According to Optimus Capital Management, urea offtakes for CY23 reached 6,642 Kilo Tonnes (KT), a modest increase from 6,612 KT in CY22. Meanwhile, DAP offtakes for CY23 demonstrated a substantial rise, standing at 1,576 KT compared to 1,201 KT in CY22.

Analysing the total availability, including local production and imports, urea recorded 6,738 KT in CY23, showing a slight drop of 2% from 6,884 KT in CY22. On the other hand, DAP’s total availability witnessed an 11% increase, reaching 1,608 KT in CY23 compared to 1,445 KT in CY22.

The offtakes for Calcium Ammonium Nitrate (CAN) experienced an 8% decrease in CY23, standing at 800 KT against 868 KT in CY22. NitroPhos (NP) offtakes, on the contrary, surged by 46% in CY23, reaching 1,085 KT compared to 741 KT in CY22.

Monthly data indicated that in December 2023 a 2.78% uptick in urea offtake, reaching 628 MT, compared to 611 MT in November 2023. However, this marked a 24% decline from the figures in December 2022, which stood at 833 KT.

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Conversely, DAP offtake in December 2023 decreased significantly to 138 KT from 278 KT in November, marking a sharp 50% decline. Compared to December 2022 figures of 154 KT, this represented a decrease of 10.39%.

Optimus Capital Management noted that the additional import of 152 KT of urea is expected to maintain fertiliser availability, but as the import price burden is shifted to farmers, no contraction in urea prices is foreseen. Despite the average international urea prices decreasing from $371/tonne to $323/tonne, local prices rose from $278/tonne to $316/tonne, leading to a contraction in local price discounts.

In the Rabi season, DAP prices continued their ascent, reaching $969/tonne in December 2023 against $917/tonne in November 2023. This surge expanded the price premium to 56%, despite international DAP prices remaining relatively stable, according to the brokerage house.

Published in The Express Tribune, January 17^th, 2024.

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