Pakistan’s overall urea fertilizer off-takes decline 10% in April’19

KARACHI: National Fertilizer Development Center (NFDC) released fertilizer data for the month of Apr’19 wherein total fertilizer off-takes clocked-in at 512k tons, depicting a decline of 10%YoY.

[the_ad id=”32940″]Industry urea sales for Apr’19 declined 22%YoY to 292k tons compared to 375k tons during the same month last year. “The decrease in urea sales is mainly attributable to rise in urea prices along with torrential rains and hailstorm that caused notable damage to crops during the month, an analyst at Pearl Securities said.

In terms of MoM performance, urea sales declined 28% during Apr’19.

Industry production, increased 14%YoY to 495k tons from 433k tons in Apr’18.

With regards to company wise performance, urea off-takes for Engro Fertilizer arrived at 141k tons, registering growth of 23%YoY in Apr’19.

Fauji Fertilizer (FFC) clocked-in sales of 89k tons (-51%YoY) whereas Fauji Fertilizer Bin Qasim (FFBL) recorded 45%YoY decline in urea off-takes to 28k tons during the month. Consequently, market share of Engro, FFC & FFBL arrived at 48%, 30% & 10% respectively during Apr’19.

In terms of urea inventory levels, industry’s inventory declined 23%YoY whereas on a MoM basis inventory levels were 150% higher at 337k tons during Apr’19, with FFC & Fatima Fertilizer constituting major proportion (70%) of total industry inventory during Apr’19.

Industry DAP off-takes rose 25%YoY to 86k tons during Apr’19. Company wise sales performance presented a mixed picture in Apr’19 as DAP off-takes for Engro declined heavily by 55%YoY whereas DAP off-takes for FFC & FFBL incremented by 66%YoY and 27%YoY to 5k & 26k tons respectively.

Moreover, FFBL regained its position as the leading DAP provider in Apr’19  with market share at 30%. Engro and FFC followed up with market share of 17% and 5% respectively during Apr’19.

On the inventory front, lower DAP off-take has led to an inventory glut as Apr’19 DAP inventory levels arrived at 620k tons (+210%YoY/+3%MoM).

With respect to price, urea price stayed stagnant at PKR1,830/bag during the month whereas DAP prices stayed in the range of PKR3,550-3,650/bag.

Moreover, during Apr’19 international urea prices stayed stagnant (+1%YoY) at US$278/ton while international DAP prices declined 4%YoY to US$394/ton as compared to US$410/ton in Apr’18.

“Going forward, as Kharif season sets in, we expect urea sales to improve in upcoming months whereas DAP sales are expected to stay under pressure owing to considerably higher prices & seasonality effect, thereby affecting demand. Moreover, import of 100k tons of urea (expected to reach the market by June end) would provide support to consistently depleting industry urea inventory levels,” a report issued by Pearl Securities said.

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