Second consecutive month: Fauji Fertilizer Bin Qasim production at a standstill

Locally manufactured urea sales plummet in February

KARACHI: Fauji Fertilizer Bin Qasim (FFBL) failed to produce a single bag of urea – the highest selling fertiliser – for the second consecutive month in February as continuous winter gas shutdown haunted the plant.

FFBL’s production of di-ammonia phosphate has also come to a halt, shows data released by National Fertilizer Development Centre on Tuesday.

Sales of DAP – the second highest selling fertiliser – also suffered and declined by 83% on a yearly basis.

Drop in sales can also be linked to seasonal effect and no change in local prices, as importers have already lowered their prices by Rs310 per bag, said Global Securities analyst Sarfaraz Abid.

Furthermore, with declining international prices and major usage of urea has pushed DAP down the preference list of farmers.

However, the decline in DAP prices will eventually pick up its sales and bode well for FFBL, said Abid.

Meanwhile, local fertiliser emerged as second best to its imported counterpart in February with sales of urea – the second highest selling fertiliser – manufactured by local companies plummeted 61% on a yearly basis.

Sales of the most widely used fertiliser declined mainly due to higher imported quantity lying at a cheaper rate of Rs1,300 per bag, which was later increased to Rs1,600 per bag, said Abid.

Moreover, decline in grain and crop prices have also resulted in lower sales during the month, added Abid.

On the flipside, urea production went down by 15% to 297,000 tons amid gas outages still haunting production of plants on the network of Sui Northern Gas Pipelines.

On a company-wise basis, FFC’s urea sales declined by 68% amid imported urea available at a discount to retail price.

Engro posted a 76% decline in sales primarily due to lower production from its EnVen plant which remained shut due to winter gas load management.

Published in The Express Tribune, March 28^th, 2012.