Pakistan's fertilizer sector achieves 8% growth in 5MCY26

June 02, 2026 (MLN): Pakistan's fertilizer sector achieved an 8% year-on-year growth in cumulative urea sales during the first five months of 2026, with overall offtakes climbing to 1,908k tons.

While the long-term trend remains positive, monthly provisional numbers for May 2026 showed a slight cooling off, with industry-wide urea offtakes dipping 3% YoY to 407k tons, according to data compiled by Arif Habib Limited.

It is noted that this minor setback was primarily driven by aggressive dealer pre-buying during March and April, which built up channel inventories just before the country's primary manufacturers implemented a round of notable price hikes.

Market Dynamics and Corporate Realignment

The pricing adjustments enacted in mid-April significantly altered the competitive landscape during May.

Fauji Fertilizer Company (FFC) increased its Sona urea (prilled) prices by PKR 100 per bag to PKR 4,500 per bag, while Engro Fertilizers (EFERT) followed suit with a parallel PKR 100 per bag increase, bringing its retail price to PKR 4,445 per bag.

This structural shift led to a stark corporate divergence in sales performance.

FFC/FFBL and Fatima Group aggressively captured the market, registering stellar YoY growth rates of 24% and 61% respectively.

Conversely, EFERT suffered a historic contraction as its monthly urea offtakes plummeted by 78% YoY to just 32k tons marking the lowest-ever recorded May offtake in the company's history which compressed its monthly market share to a meager 7.9%.

Agritech Limited (AGL) also posted strong localized growth, elevating its monthly sales by 110% to 31k tons.

On a cumulative five-month basis, FFC/FFBL cemented its dominance by expanding its total sales by 29% to reach 1,099k tons. Meanwhile, EFERT's cumulative sales fell 13% to 420k tons.

Despite the uneven sales momentum, overall industry urea inventories remained healthy and broadly stable at 821k tons by the end of May 2026.

Interestingly, EFERT held the lion's share of this inventory at 71.9%, indicating that while its short-term sales hit a temporary snag, its production lines remained robust and steady.

Geopolitical Headwinds and Shifting Crop Nutrition

The phosphate market faced a far harsher environment as Diammonium Phosphate (DAP) offtakes plummeted by 38% YoY to 59k tons in May 2026, driven by an unfavorable combination of soaring international prices and mounting raw material costs.

Heightened geopolitical frictions between the United States and Iran put upward pressure on international supply chains, triggering a 23% quarter-on-quarter spike in DAP prices to USD 873 per ton.

Because international phosphoric acid prices remained fixed at USD 1,290 per ton, the DAP-phosphoric acid trading margin expanded to USD 267 per ton.

Faced with these steep international price hikes, domestic farmers altered their purchasing behavior by partially turning away from traditional DAP and shifting toward more affordable alternative fertilizers.

This agronomic pivot directly benefited secondary product lines, with Nitro Phosphate (NP) monthly offtakes jumping 18.4% YoY to 89.5k tons and Calcium Ammonium Nitrate (CAN) sales rising 7.3% to 89k tons.

This substitution effect hit local corporate DAP sales hard, causing FFC/FFBL to slide 44% to 38k tons and EFERT to contract 52% to 7k tons, while Fatima Group dropped 81% to a baseline of 1k ton. In contrast, private imports stepped into the gap, expanding by 32% to hit 14k tons for the month.

Copyright Mettis Link News