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Karachi, September 26, 2012 (PPI-OT): Urea sales plunge by a 17% MoM in August 2012
The National Fertilizer Development Centre (NFDC) has released fertilizer production and offtake figures for the month of Aug-12.
Urea sales continue to slide, 17% MoM and 42% YoY
Urea off take during Aug-12 declined by 17% MoM and 42% YoY to 322 kTons, while during 8MCY12; this figure was lower by 7% YoY to 3.5 million tons in comparison to 3.7 million tons sold in the same period last year.
According to Arif Habib Limited, this was mainly on account of heavy pre buying from the dealers in June-12, who in anticipation of a price hike went on a buying spree. In addition to this, heavy rainfall in the country also curtailed the fertilizer demand during the month under review. Inventory of local producers stood at 298kTons, while total urea closing inventory (both local and imported) was recorded at 466kTons. Meanwhile, average urea retail price in Aug-12 was recorded at PKR 1,722/bag, which is 2% lower than the average price in July-12.
DAP sales remain below par
DAP sales in Aug-12 declined by 47% MoM to 53 kTons. This figure is lower by 30% on a YoY basis. DAP sales in 8MCY12 declined by 19% YoY to 424 kTons in comparison with the corresponding period last year. On MoM basis FFBL and ENGRO sales significantly decreased by 66% and 45% respectively while on the YoY basis those figures were lowered by 67% and 47% respectively. DAP prices during May-12 were recorded at PKR 3,846/bag. Aug-12 closing inventory of DAP stood at 373 kTons (of which 231 kTons is locally produced DAP of FFBL).
| Fertilizer offtake (Ktons) | Aug-12 | Aug-11 | YoY | Jul-12 | MoM | 8MCY12 | 8MCY11 | YoY |
| Urea |
322 |
556 |
-42% |
389 |
-17% |
3,459 |
3,717 |
-7% |
| DAP |
53 |
77 |
-30% |
101 |
-47% |
424 |
522 |
-19% |
| Company offtake (Ktons) | Aug-12 | Aug-11 | YoY | Jul-12 | MoM | 8MCY12 | 8MCY11 | YoY |
| Urea | ||||||||
| FFC |
159 |
203 -22% |
174 |
-9% |
1,467 |
1,584 |
-7% |
|
| FFBL |
22 |
36 -39% |
19 |
16% |
180 |
292 |
-38% |
|
| ENGRO |
78 |
150 -48% |
67 |
17% |
542 |
834 |
-35% |
|
| FATIMA |
14 |
33 -56% |
14 |
3% |
198 |
289 |
-31% |
|
| DAP | ||||||||
| FFBL |
17 |
50 |
-67% |
50 |
-66% |
176 |
352 |
-50% |
| ENGRO |
10 |
20 |
-47% |
19 |
-45% |
130 |
151 |
-13% |
| Average Price (PKR/bag) | Aug-12 | Jul-12 | MoM | |||||
| Urea |
1,722 |
1,750 |
-2% |
|||||
| DAP |
3,846 |
3,862 |
-0.4% |
|||||
| Source: NFDC |
Sales of imported urea decrease in Aug-12
The National Fertilizer Marketing Limited (NFML) managed to sell 39 kTons in Aug-12, depicting a decrease of 61% MoM. Sales of imported urea during 8MCY12 stood at 916 kTons and represents 27% of total urea sold in the country during the period. NFML’s closing stock at the end of Aug-12 was recorded at 168 kTons. With a tender to import 300 kTons of urea already has been executed and is expected to reach in the first week of October-12. Imported urea will be available at subsidized price of 1,600/bag which is around 4% low-priced than the cheapest locally manufactured urea available in the market. Rising demand in Rabi season has the capacity to absorb this imported urea without causing a major dent to local manufacturers. However if the government continues to import urea then the risk of further price cuts by the local manufacturers cannot be ruled out.
Heavy rainfall and delayed buying to curtail Sep-12 off take as well
Fertilizer off take situation in Sep-12 does not appear rosy either, as Arif Habib Limited’s channel check suggests that the demand has been dented by the heavy rains and delayed buying from the dealers, who are waiting for the arrival of imported urea.