Karachi, July 01, 2020: Pakistan urea sales in Jun-2020 are expected to jump by 74 percent YoY, to clock in at 1,115k tons after clarification on Urea subsidy. The sales are likely to be highest recorded in the month of June during the last five years.
Recall that in May-2020, dealers and farmers held back their purchases for the materialization of subsidy announced earlier by the federal government. Later, in a meeting between the federal government officials, dealer association, fertilizer importers and officials of provincial governments, it was decided that there would be no subsidy on Urea, while subsidy on DAP is likely to the tune of Rs925/bag (which has still not materialized).
In 1H2020, Urea sales are expected to clock in at 2,622k tons compared to 2,888k tons in 1H2019, down 9 percent YoY.
Amongst the companies, Engro Fertilizer (EFERT) is expected to post highest increase in Urea sales by 179 percent YoY to 490k tons during Jun-2020, followed by Fauji Fertilizer (FFC) up by 71 percent YoY to 450k tons.
Urea production in Jun-2020 is expected to decline by 16 percent YoY at 470k tons due to absence of LNG players. This is likely to take Urea closing inventory to ~471k tons.
Total DAP sales in Jun-2020 are anticipated to clock in around 120k tons, down by 24 percent YoY, taking 1H2020 DAP sales to 542k tons compared to 646k tons, down by 16 percentYoY.
Company wise data suggests, EFERT is expected to record sales of 35k tons (up by 16 percent YoY), while FFC and FFBL are likely to post declines of 51 percent YoY and 12 percent YoY, respectively. FFBL’s DAP production is likely at 72k tons, taking closing inventory of DAP to around 540k tons.