Fertilizer off-takes for May, showing signs of improvement – Alfalah Securities Limited

Karachi, June 28, 2012 (PPI-OT): Urea off-takes for the month of May 2012 declined by 20.1%YoY to 377,463 tons as compared to 472,697 tons in the same period last year, as per the data released by NFDC.

According to Alfalah Securities Limited, however, Urea sales witnessed an increase of 22.37%MoM, which is a consequence of a cut in urea prices of PkR 145 per bag along with early procurement of urea by dealers ahead of another price increase of PkR 50 per bag from June 16, 2012.

Local manufacturers sold 329,927 tons of urea in May 2012 where the Fauji twins (FFC and FFBL) were the main beneficiary as they contributed to 77.57% (255,953 tons) of total local sales. Urea sales of FFC, FFBL, ENGRO and FATIMA stood at 204,057 tons (Up by 172.47%MoM), 51,896 tons (Up by 169.9%MoM), 64,176 tons (Up by 114.11%MoM) and 1,485 tons (Up by 24.89%MoM) respectively during May 2012.

On the other hand, sales of imported urea mainly contributed by National Fertilizer Marketing Limited dropped by 69.76%MoM to 47,536 tons as compared to 157,209 tons during the same period last year.

Overall Di-Ammonium Phosphate (DAP) off-takes during May 2012 stood at 26,016 tons, depicting a decline of 13.25%YoY and 56.9%MoM mainly due to its sluggish demand during the month. FFBL’s DAP sales, contributing to 65.38% to the total, stood at 17,009 tons in May as compared to 26,678 tons in the previous month. Alfalah Securities Limited believes the fertilizer off-takes of local players would improve going forward due to minimal price differential between the locally produced and imported urea and also due to an improvement in demand of these products.