Pakistan Fertilizer Sales Witness Notable Declines Amid Advance Purchases

Karachi: Fertilizer sales in Pakistan experienced significant declines in January 2024, primarily due to advance procurement by farmers in the previous month. Urea sales fell 27% year-on-year to 446,000 tons, marking a considerable drop attributed to this preemptive buying behavior.

According to a statement by AKD Securities Limited, sales of Di-Ammonium Phosphate (DAP) also saw a downturn, decreasing by 8% compared to the same period last year, with sales figures dipping from 67,000 tons to 61,000 tons. Other fertilizers, such as Calcium Ammonium Nitrate (CAN), Nitro Phosphate (NP), and Nitrophosphate Potassium (NPK), also recorded declines of 2%, 33%, and 28%, respectively.

A closer look at company-specific performance reveals that Fauji Fertilizer Company (FFC) and Engro Fertilizers Limited (EFERT) witnessed significant reductions in urea sales by 27% and 49% year-on-year, respectively. In contrast, FATIMA Fertilizer Company saw a 10% rise in urea offtakes, which contributed to an increase in its market share.

Despite these declines, the outlook for the fertilizer sector remains positive. The report maintains an overweight stance on the industry, citing a stable earnings outlook and attractive dividend yields. FFC and Engro Corporation are highlighted as preferred choices within the sector.

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