Fertiliser sales pick up, but still dismally low

Urea off-take improves 65% MoM, but down 37% YoY.

KARACHI: Fertiliser sales continued to pick up in March 2012; total urea off-take was registered at 263,000 tons – down 37% year-on-year (YoY) but up by 65% month-on-month (MoM). This is mainly attributable to the delay in Kharif sowing due to unavailability of seeds and relatively higher urea prices, says a Topline Securities research note.

Sales of local urea in March stood at 113,000 tons, almost a third of sales in the same month last year. This is primarily due to continuous availability of subsidised imported urea, which is available to farmers at cheaper prices than local brands.

An AKD research note says that there was slight improvement in Fauji Fertilizer Company’s (FFC) urea sales, which were up 12% MoM; but the numbers were on the lower side as compared to the same month last year (-53% YoY). Engro had a second consecutive month of disappointing urea sales, which stood at just 13,400 tons; the company held a closing inventory of 173,900 tons; while Fatima Fertiliser sold just 600 tons.

Improvement was witnessed on the DAP front, as DAP off-take increased by 28% YoY to 46,000 tons; while almost quadrupling on a MoM basis due to a lower base effect. During January-March, cumulative DAP sales declined by 46% YoY to 86,000 tons. This is due to the fact that whereas local DAP remained short amid higher winter gas curtailment, declining international DAP prices led importers to opt for a wait and see policy. This led to lower availability of DAP in the market.

CAN off-take improved significantly to 38,500 tons; up 92% YoY. NP off-take registered at 11,500 tons, in line with recent trends.

Overall fertiliser sales (including urea, DAP and others) stood at 398,000 tons during March 2012, down 27% YoY.

Published in The Express Tribune, April 27^th, 2012.