Pakistan Fertilizer_May'21 offtakes on an uptrend, (AKD Daily, Jun 29, 2021)
AKD Daily
Pakistan Fertilizer:May’21 offtakes on an uptrend,
- As per the numbers released by NFDC, urea offtake increased 59/105% MoM/YoY to 492K MT. This takes 5MCY21 urea offtake to 2.2mn MT, up 46%YoY. The increase in offtake can be attributed to the low base effect, where increase in offtake in 5MCY21 is led by EFERT (up 154%YoY).
- The overall urea inventory increased to 612K MT (30% of May’21 urea offtake) up 15%MoM, but still below the levels witnessed during the same period last year. Urea price, already up by c. PkR75/bag FYTD to PkR1,675/bag may however sustain given improving farmer economics.
- DAP offtake increased 279/185% MoM/YoY to 173K MT, taking 5MCY21 DAP offtakes to 532K MT, up 26% YoY. FFC posted 135%YoY higher DAP offtake in 5MCY21 as opposed to 2/6% increase in EFERT/FFBL DAP offtakes.
- DAP inventory in May’21 closed at 130K MT, down 74% YoY. This translates well for FFBL, which can pass on cost pressures (phosphoric prices) amid low industry wide inventory levels on the onset of high demand season.
- We continue to like FFC from the fertilizer space due to healthy EBITDA generation and D/Y of 11.5% on offer.
AKD Research
Fauji Fertilizer is engaged in the manufacturing, purchasing and marketing of fertilizers including the investment in other fertilizer manufacturing operations. As of Dec 31 2004, Co. had a design capacity of 2,455,000 tonnes for urea production and 445,000 tonnes for DAP production.
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