Urea, DAP production rises 2% in 2011

However, on month-on-month basis, fertiliser production declined.

KARACHI: Fertiliser production has increased by 2% in the first nine months of 2011 owing to a 19% increase in the production of CAN, a type of fertiliser, along with boost in production from Engro’s new plant EnVen.

Meanwhile, offtake rose by 5% during January to September 2011, according to data released by National fertiliser Database Center for the month of September 11.

However, on a month on month (MoM) basis, during the month of September 2011, total fertiliser sector’s production had declined as it fell by 5%, while DAP production also fell by 25% during the same period.

Offtake, on the other hand, painted a different story. During September 2011, total industry offtake propped up by 1% compared to the previous month. Unusual DAP offtake, which grew by a massive 61% due to pre-buying phenomenon, was the prime reason behind healthy offtake during the said period.  On YoY basis, urea volumes went up by 62%, while offtake of DAP went down by 52% during September 2011 as compared to last year.

Urea production also improved by 11% YoY during the period under review as gas supply to the Sui Northern Gas Pipeline Limited-based producer remained sustainable.

Consequently, the availability of urea in September was also higher as compared to August 2011. The growth in urea offtake can be tagged to increase in availability in the market and anticipated price hike, announced in the start of October 2011.

On a company-wise basis, Fauji Fertiliser Company witnessed 79% YoY growth, while Engro posted another massive growth of 171% YoY in sales and 62% YoY growth in production, as its new plant remained operational during the month.

Published in The Express Tribune, October 27^th, 2011.