Urea Sales of local producers down in Jan

ISLAMABAD: Urea off take in Pakistan increased by 55% in January 2012 to 0.61mn tons, according to the latest numbers released by NFDC here on Friday.

Though January remains an off-season for urea buyers, sharp increase in its sales was a result of aggressive buying by dealers as imported urea was available at a subsidized rate.

This has some how affected sales of local manufacturers which were already facing gas curtailment due to peak winter season. Thus, volumetric sales of major players like FFC and Engro posted a decline of 6% and 39% to 198k tons and 49.4k tons respectively. On the other hand, zero sales were recorded by FFBL due to winter gas shutdown like last year.

On the flip side, DAP sales reduced by 51% primarily due to anticipated decline in DAP prices thanks to sharp reduction of prices in international DAP markets

FFBL, sole producer of DAP, recorded sales of 15.7k tons in January 2012 against a sales of 28.7k tons last year due to higher winter gas curtailment this year.

During January 2012, total fertilizer sales stood at 679k tons as compared to 540k tons last year, up 26%. For February 2012, we expect urea sales of local producers to be affected further due to subsidized urea available with TCP.

Though gas issues remain at the heart of fertilizer sector, higher urea prices would continue to offset the impact of production losses in 2012. We maintain ‘Over-weight’ stance on Fertilizer sector at current levels.

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