Urea sales soared 147.7% to 649,000 tons in January 2021 compared to the corresponding period of last year, according to data released by the National Fertiliser Development Centre (NFDC).

At the end of January 2021, urea inventory was recorded at 99,000 tons, down 67% against 299,000 tons in the previous month, according to a Taurus Research report.

Di-ammonium phosphate (DAP) stocks were recorded at 106,000 tons in January, down 6% against 112,000 tons in the previous month, as per the brokerage house report.

While urea sales grew 1.48 times year-on-year, they were down 26% on a month-on-month basis.

Higher sales year-on-year came on the back of low offtake last year, ie 262,000 tons, said Taurus Research fertiliser analyst Ameer Hamza while talking to The Express Tribune.

Company-wise, volumes were up twice for Fauji Fertiliser and 3.7 times for Engro Fertilisers. However, Fatima Fertiliser recorded a dip of 29% in the month under review on a year-on-year basis. Sales of Fauji Fertiliser Bin Qasim were zero during January 2021 due to its plant turnaround period, the analyst stated.

DAP sales were up 88% year-on-year and down 60% month-on-month. DAP sales for January 2021 were recorded at 82,000 tons. Sales declined 60% month-on-month due to a tight supply situation worldwide and low seasonal demand, taking sales of Fauji Fertiliser down by 98% year-on-year, according to the report.

However, for Fauji Fertiliser Bin Qasim, sales came in at 17,000 tons, down 8% year-on-year and 79% month-on-month. Moreover, sales of Engro Fertilisers stood at 27,000 tons, up 22 times year-on-year. Overall, the phosphate segment showed a growth of 1.17 times in January 2021 against the same period of last year.

Price outlook

During the month under review, domestic prices of urea inched up 1.3% and DAP prices rose 4.8%.

International prices also showed a bullish trend, said Hamza. Urea prices in China fluctuated between $280 and $325 per ton. However, DAP prices were estimated at around $390 to $460 per ton, he said. Ex-Karachi urea prices were hovering at around Rs2,930 to Rs3,800 per bag while DAP prices were in the range of Rs3,888 to Rs5,654 per bag.

Urea demand was likely to touch 6.2 million tons in the current year given better farm economics and better pricing dynamics, he said. “Disparity in international prices, gas price hikes and natural disasters like locust attacks may be downside risks for the industry.”

Published in The Express Tribune, February 26th, 2021.

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