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Pakistan Fertilizer: Urea sales likely to decline by 14% YoY in Aug-2020

• Pakistan Urea sales in Aug-2020 are expected to decline by 14% YoY to clock in at 537k tons as compared to 625k tons in Aug-2019.
• Similarly, sales will be down 7% MoM, primarily due to heavy rains across the country during Aug-2020.
• Urea production in Aug-2020 is expected to decline by 9% YoY at 515k tons, while will be up 4% MoM due to start of RLNG-based manufacturers. This is likely to take Urea closing inventory to ~312k tons.
• Urea sales are expected at 3,783k tons during 8M2020 compared to 3,978k tons in 8M2019, down 5% YoY.
• Amongst the companies, Fauji Fertilizer Bin Qasim (FFBL) and Fauji Fertilizer (FFC) are expected to post increase in Urea sales by 25% YoY and 11% YoY to 55k tons and 260k tons, respectively during Aug-2020.
• Engro Fertilizer (EFERT) is likely to post a decline in its Urea offtake by 17% YoY to 155k tons in Aug-2020 compared to 186k tons in Aug-2019.
• Total DAP sales in Aug-2020 are anticipated to clock in at around 280k tons, up by 166% YoY and 13% MoM. The significant increase in DAP off take in Aug-2020 is likely because of pre-buying by dealers in anticipation of hike in DAP prices.
• DAP sales are expected at 1,126k tons during 8M2020 compared to 953k tons in 8M2019, up 18% YoY.
• Company wise data suggests, EFERT is likely to record sales of 60k tons (up 213% YoY) followed by FFC 50k tons (up 181% YoY) and FFBL 100k tons (up 114% YoY).

FFBL’s DAP production is likely at 70k tons, taking closing inventory of DAP to around 270k tons.