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Pakistan Fertilizer: Urea sales likely to jump by 22% YoY in Jul-2020

• Pakistan Urea sales in Jul-2020 are expected to jump by 22% YoY to clock in at 567k tons as compared to 465k tons in Jul-2019.
• However, sales are likely to decline by 51% MoM as Jun-2020 had largely catered to pent up demand of previous couple of months because of uncertainty surrounding the Urea subsidy.
• Urea sales are expected at 3,239k tons during 7M2020 compared to 3,353k tons in 7M2019, down 3% YoY.
• Amongst the companies, Engro Fertilizer (EFERT) is expected to post highest increase in Urea sales by 86% YoY to 326k tons during Jul-2020.
• Fauji Fertilizer (FFC) is likely to post a decline in its Urea offtake by 36% YoY to 112k tons in Jul-2020 compared to 176k tons in Jul-2019.
• Urea production in Jul-2020 is expected to decline by 12% YoY at 499k tons due to absence of RLNG-based players. This is likely to take Urea closing inventory to ~346k tons.
• Total DAP sales in Jul-2020 are anticipated to clock in at around 260k tons, up by 29% YoY after the clarification that the subsidy will start from Rabi season.
• DAP sales are expected at 858k tons during 7M2020 compared to 848k tons in 7M2019, up 1% YoY.
• Company wise data suggests, EFERT is likely to record sales of 72k tons (up 74% YoY) followed by FFBL’s 105k tons (up 5% YoY), while FFC is likely to post a decline of 54% YoY to 18k tons.

FFBL’s DAP production is likely at 75k tons, taking closing inventory of DAP to around 420k tons.