Karachi, March 27, 2014 (PPI-OT): As per the latest numbers released by National Fertilizer Development Centre (NFDC), urea sales for 2MCYI4 have clocked in at 997.6k tons as against 936.1k tons sold in the same period last year, depicting growth of 6.6%YoY.
According to AKD Securities, as for DAP, the phosphate based fertilizer’s off take during the same period grew by impressive 67.4%YoY and was recorded at 128.1k tons versus 76.5k tons in the corresponding period previous year. Blessed with the luxury to operate both its plants, Engro Fertilizer’s (EFERT) remained the only major player to post impressive off take growth (62.5%YoY) with urea sales of 335.7k tons. Apart from EFERT, FATIMA remained the only other major manufacturer with positive urea off take growth.
Cumulative local urea off take was realized at 743.4k tons, up 13.6%YoY. With ample availability of locally manufactured urea, sales of imported urea faltered by 9.7%YoY to 254.1k tons in the aforementioned period. During the period under review, sector’s DAP sales posted impressive figures as well, growing by 67.4% YoY to 128.1k tons as against 765k tons sold during the same period last year. AKD Securities believes higher DAP sales can be due to potential price increase going forward. On individual basis, DAP sales of FFBL came off by 15.2%YoY to 37.2k tons following lower production due to gas curtailment. EFERT’s DAP off take grew by 112.6%YoY to 37.8k tons during the period under review.
Locally manufactured urea sales up 13.6%YoY: Following higher production (due to EFERT operating both its plants), sales of locally manufactured urea grew by 13.6%YoY (7pps higher than sectors cumulative urea sales growth).
This led to improvement in market share of the locally manufactured urea to 75% during 2MCY14 vs. 70% in the same period last year. As for market share of local players, EFERT remained the star performer as its market share rose to 34% as against 22% last year at expense of Fauji Fertilizer Company (FFC) whose market share came down from 42% in 2MCY13 to 36% in 2MCY14. As for DAP, FFBL’s market share declined to 29% from 57.3% in the same period last year, while EFERT strengthened its market share by 6pps to 29.4%.
Urea Market Share
2MCY14 2MCY13 %change
FFC 36% 42% 6%
FFBL 0% 1% -1%
EFERT 34% 22% 12%
FATIMA 5% 5% 0%
NFML 25% 30% -5%
Inventories at high level but imports can’t be ruled out: At the conclusion of2MCYl4, cumulative urea inventory of the sector stood at 387.1k tons and with EFERT running both its plants till 1QCY14, AKD Securities expects inventory position to remain robust at tail end of IQCY14. However, at the time gas supply is diverted back to Guddu power plant. EFERTs production will go down by 50-60k tons per month. ln this case AKD Securities believes the requirement for import of urea will arise as Kharif season gets into full swing, going forward.