Pakistan Fertilizer_Urea offtake cross 1mn MT mark in Jun’20, (AKD Daily, Jul 27, 2020)
AKD Daily
Pakistan Fertilizer: Urea offtake cross 1mn MT mark in Jun’20
- As per the data released by NFDC, urea offtake for Jun’20 increased 4.9x/81% MoM/YoY to 1.16mn tons. The sequential increase in offtake was witnessed industry-wide, due to a combination of low base effect and pre-buying.
- The farmers delayed purchases in the previous month in anticipation of subsidy. Meanwhile, disallowing 20% of expenses to industrial undertakings in case of sales to unregistered dealers (initially w.e.f Jul’20) led to pre-buying by the dealers (urea inventory down 63%MoM to 414K tons in Jun’20).
- On cumulative basis, urea offtake declined 7%YoY to 2.6mn tons in 1HCY20, despite surreal pick-up in offtake in Jun’20, courtesy EFERT’s flattish urea offtake, in addition to in-operational LNG plants.
- DAP offtake for Jun’20 clocked in at 175K tons, up 2.9x/26% MoM/YoY, where EFERT remained at the forefront. The cumulative offtake for 1HCY20 clocked in at 598K tons, flattish YoY. FFBL remained the only player posting a growth in DAP offtake (up 24% YoY in 1HCY20).
- With LNG availability for next 3 months, we expect urea inventory to remain at or above 400K tons level. However, this may not be sufficient enough to constrict fertilizer players’ pass-on ability in case of any gas price hike (gas price increase delayed since Jan’20), in our view.
AKD Research
Fauji Fertilizer Bin Qasim Limited is a Pakistan-based holding company. The Company manufactures, purchases and markets fertilizers. It is involved in meat, dairy and coal based energy generation sectors. It has identified its potential business segments and has undertaken investments in the areas of food, financial, power sector and wind energy projects. Its products include Granular Urea, such as Sona Urea, and Di Ammonium Phosphate (DAP), such as Sona DAP. Sona Urea is a synthetic organic compound containing nitrogen in amide form available in the form of white solid prills. It is applied to soil and also suitable in solution form as spray application. Sona DAP contains nutrient element, phosphorous besides nitrogen available in flowing granular form Granules are stronger, harder and of uniform size. It is suitable for various crops and soils recommended for initial application. It produces over 791,260 metric tons (MT) of DAP and approximately 433,610 MT of Urea.
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