Fertilizer Sales Projected to Rebound in June 2025 Amid High Inventory Levels

Karachi: Fertilizer sales are anticipated to experience a significant recovery in June 2025, with Urea off-take expected to reach 580,000 tons, marking a 20% increase compared to the previous year and a 39% rise from the previous month. Despite this growth, the cumulative Urea off-take for the first half of the calendar year 2025 is projected to decline by 23% year-on-year. Meanwhile, the off-take for Di-Ammonium Phosphate (DAP) is likely to decrease by 15% during the same month.

The company-wise breakdown reveals that Fauji Fertilizer Company (FFC) is expected to record Urea off-take of 269,000 tons in June 2025, which includes 51,000 tons of granular Urea, reflecting a modest 4% year-on-year increase. In contrast, Engro Fertilizers (EFERT) is likely to achieve a substantial 32% year-on-year growth, with off-take reaching 205,000 tons. EFERT’s Urea market share improved by three percentage points year-on-year, while FFC’s share decreased by eight percentage points.

Despite the anticipated rise in sales, Urea inventory levels are predicted to remain high, at approximately 1.3 million tons by the end of the first half of 2025. Assuming stable capacity utilization, the potential for export allowances could serve as a crucial factor in addressing the inventory surplus, counterbalancing the expected increase in local sales during the latter half of the year.

Local DAP prices have continued to climb, currently standing at around 13,000 rupees per bag. This increase, amounting to a 10% rise since the beginning of the calendar year, is largely attributed to the higher costs of imported DAP and phosphoric acid. Primary margins are presently at approximately 278 US dollars per ton, compared to the average of 327 US dollars per ton recorded in the previous year.