Urea sales down, DAP off-take up in February

Sales of urea sharply fell in February on subdued demand, while off-take of diammonium phosphate (DAP) rose on inventory buildup by the dealers following a rise in the international prices of fertiliser, brokerages reported on Wednesday.

Urea sales decreased 38 percent month-on-month (MoM) and 20 percent year-on-year (YoY) to 251,000 tonnes in February.  Analyst Saquib Hussain at Sherman Securities said urea sales could largely be attributable to excessive buying in the preceding months and less working days in February.

On the other hand, DAP sales in February clocked in at 92,000 tonnes, up 51 percent compared to January and up 30 percent compared with February 2016. Hussain said increase in DAP sales was mainly due to aggressive buying by the dealers in anticipation of increase in local DAP prices amid rising international DAP prices.

On a cumulative basis, urea sales remained unchanged at 657,000 tonnes during the first two months of 2017, while DAP grew three percent to 153,000 tonnes in the January-February period. Analyst Tahir Abbas at Arif Habib Limited said the closing inventory of urea with the local producers stood at 941,000 tonnes as of February 28, while total urea’s closing inventory (both local and imported) was recorded at 1.178 million tons. DAP’s closing inventory stood at 164,000 tonnes and FFBL and EFERT held approximately 54,000 and 27,000 tonnes, respectively.

Fauji Fertilizer (FFC) and Fauji Fertilizer Bin Qasim (FFBL)’s cumulative urea off-take dropped 24 percent MoM to 119,000 tonnes in February. Likewise, Engro Fertilizer (EFERT)’s urea sales declined 11 percent MoM to 95,000 tonnes. Fatima Fertilizer’s off-take slumped 77 percent MoM to 29,000 tonnes.

During the two months of 2017, Fatima Fertilizer, however, remained the outperformer as its sales surged 241 percent to 157,000 tonnes. FFC and FFBL’s cumulative off-take and EFERT’s sale declined 16 percent and 24 percent, respectively.

As far as DAP is concerned FFBL managed to sell 65,000 tonnes in February, up 92 percent MoM and 161 percent YoY. Furthermore, its two-month sales figure depicted a solid growth of 168 percent to 99,000 tonnes.

EFERT’s DAP sales registered 156 percent MoM increase to 12,000 tonnes in February. However, in two months, the company recorded 67 percent decline in DAP sales to 17,000 tonnes.