Fertilizer offtake increases by 1.7% YoY in January

March 01, 2023 (MLN): The country’s overall nutrient offtake increased In January 2023 increased by 1.7% YoY compared to the same month last year, reaching 407 thousand tonnes, the latest monthly report of fertilizer offtake issued by the National Fertilizer Development Company (NDFC) showed.

The offtake of nitrogen saw a rise of 3.7%, with 340 thousand tonnes, while the offtake of phosphate decreased by 8.3%, reaching 60 thousand tonnes. Potash offtake decreased by 1.0%. Urea offtake increased by 5.6%, reaching 631 thousand tonnes, while DAP offtake saw a decrease of 15% compared to January 2022, with 96 thousand tonnes.

This increase in urea offtake is attributed to the sale of imported urea by NFML, which was available at a market retail price of Rs. 2,440 per 50 kg bag, compared to the average price of Rs. 2,722 in the open market.

According to the data, cumulative fertilizer nutrient offtake during Rabi 2022-23 (October-January) was lower by 4.6% compared to the same time frame of last year's Rabi 2021-22. The offtake of phosphate and potash decreased significantly by 25.5% and 69.9%, respectively, while the offtake of nitrogen increased by 3.9%.

In terms of fertilizer products, the offtake of urea increased by 8.4% to 2,477 thousand tonnes during Rabi 2022-23, while the offtake of DAP decreased by 29.1% to 561 thousand tonnes compared to the same time frame of Rabi 2021-22.

In January 2023, the total production of all fertilizer products in Pakistan was 613 thousand tonnes, with urea accounting for the majority of production at 78.2%. The remaining production included CAN at 64 thousand tonnes, Nitrophos at 62 thousand tonnes, SSP at 4.0 thousand tonnes, SOP at 0.21 thousand tonnes, and various grades of NPK at 3 thousand tonnes.

Additionally, a total of 8 thousand tonnes of imported supplies were received, comprising 7.6 thousand tonnes of DAP and 0.5 thousand tonnes of AS.

The price of all fertilizers except SSP (granular) increased in the domestic market compared to the previous month. According to data, the prices of urea (sona), urea (other), SOP, NP, NPK's, and CAN in January rose by 7.5%, 6.7%, 5.6%, 5.3%, 3.1%, and 2.8%, respectively.

However, the price of DAP increased by only 1.6%, while the price of SSP (granular) decreased slightly by 0.6% as compared to the previous month. Meanwhile, in the international market, the price of FOB bulk China urea fluctuated between US $ 410-460/tonne.

FOB Prilled bulk Arabian Gulf price was quoted at US $ 380 to 430/tonne. DAP prices in Australia were quoted around US $ 605-660/tonne FOB bulk while in China market it ranged between US $ 635-690/tonne FOB. MAP and TSP prices were recorded in the range of $603-623 and 510-600/tonne, respectively during January 2023.

The price of imported urea was in the range of Rs5,671 to Rs6,680 per 50 kg bag, while the Ex-Karachi price of DAP was in the range of Rs8,470 to Rs9,328 per 50 kg bag. Pakistan's estimated urea availability for Rabi 2022-23 is 3,555 thousand tonnes, according to recent data.

The supply includes an opening balance of 294 thousand tonnes, 2,964 thousand tonnes of domestic production, and 298 thousand tonnes of imported supplies. The projected offtake for the period is 3,369 thousand tonnes, leaving 203 thousand tonnes of opening balance for Kharif 2023.

Meanwhile, the estimated availability of DAP during Rabi 2022-23 is 1,043 thousand tonnes, with 460 thousand tonnes of opening stock, 299 thousand tonnes of imported supplies, and 284 thousand tonnes of domestic production.

The expected offtake of DAP for the period is 739 thousand tonnes, resulting in a closing balance of 301 thousand tonnes for Kharif 2023.

The data show that the country's urea production capacity is being fully utilized, with domestic production accounting for around 83.5% of the total availability.

However, the DAP supply remains heavily reliant on imports, which represent about 28.7% of the estimated availability.

The government has taken various measures to ensure the timely availability of quality fertilizers to farmers at affordable prices, including the provision of subsidies, tariff reductions, and import facilitation.

Province-wise, During the review month, urea offtake decreased by 4% in Punjab. While its offtake increased by 40%, 2%, and 28% in Sindh, KP, and Balochistan. DAP offtake during January 2023 increased in KP and Balochistan by 119% and 105%, respectively, whereas it decreased by 16% and 30% in Punjab and KP, respectively. 

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