Fertilizer sales fall 21% in June 2024

July 18, 2024 (MLN): Fertilizer sales, including urea and DAP, fell 21% YoY to 606,000 tonnes during June 2024, according to the latest monthly report on fertilizer offtake issued by the National Fertilizer Development Company (NDFC).

Urea offtake stood at 483,000 tonnes, while DAP stood at 123,000 tonnes, representing decreases of 20.9% and 22.2%, respectively, compared to June 2023.

Cumulative urea offtake from April to June was 1.21 million tonnes against a projected demand of 1.741m tonnes, which is 30.5% lower.

The decline in offtake during the first half of Kharif 2024 may be attributed to substantially lower wheat prices than the minimum support price and delayed sowing of Kharif crops due to climate change, the report noted.

Nonetheless, it is hoped that urea offtake will recover during the remaining period of Kharif, it added.

The total availability of urea is estimated at 3.378m tonnes, with domestic production at 3.204m tonnes and carryover stock at 174,000 tonnes.

Urea offtake estimates for Kharif 2024 are 3.1m tonnes, with a closing balance of around 261,000 tonnes.

Expected imports of 150,000 tonnes of urea in September 2024 will improve its availability during Rabi 2024-25, the report added.

The expected availability of DAP during Kharif 2024 is around 774,000 tonnes, comprising 78,000 tonnes of opening stock, 262,000 tonnes of imported supplies, and 434,000 tonnes of domestic production.

DAP demand is estimated at around 788,000 tonnes. Confirmed imports during July and August 2024 are 70,000 tonnes and 65,000 tonnes, respectively.

The supply/demand gap will be filled through imports by the private sector as usual, it added.

Supply/Demand Situation

Total urea availability during June 2024 was 923,000 tonnes, which comprised 425,000 tonnes of previous month leftover and 497,000 tonnes domestic production.

Urea offtake during June 2024 was 483,000 tonnes, leaving a closing balance of 431,000 tonnes

Total availability of DAP during June 2024 was 289,000 tonnes, which included 219,000 tonnes stock of previous month and 70,000 tonnes domestic production.

Its offtake was 123,000 tonnes leaving closing balance of 166,000 tonnes

Domestic prices

Price of urea (sona) and urea (other) decreased by 2.0 and 1.5%, respectively while that of CAN increased by 1.3% over May 2024.

Prices of all phosphate fertilizer products decreased during June 2024 compared with previous month i.e., DAP, NP, SSP and various grades of NPKs decreased by 5.3, 3.2, 1.3 and 0.4%, respectively.

The average price of urea (sona), urea (other) and DAP was Rs4,744, Rs4,630 and Rs10,941 per 50 kg bag, respectively

International prices

Price of urea in China market remained more or less same while it increased by $55-60 per tonnes in Arabian Gulf during June 2024 compared with previous month.

Urea prices were quoted as $317-338 and $320-355 per tonne FOB bulk for China and Arabian Gulf, respectively.

Rising trend in DAP prices was observed during June 2024 with an average increase of $40-78 per tonnes.

DAP prices were in the range of $487-650 per tonne FOB bulk in Australia and $520-550 per tonne FOB in China.

MAP and TSP bulk prices were $549-594 and $410-480 per tonne FOB, respectively.

Ex-Karachi price of imported urea ranged between Rs5,946 and 6,542 per 50 kg bag, while price of imported DAP (China) was in the range of Rs9,761 to 10,253 per 50 kg bag.

Nutrient Offtake

Total nutrient offtake during June 2024 was 367,000 tonnes, reflecting a decrease of 20.2% over June 2023.

In nutrient terms, nitrogen and phosphate offtake decreased by 19.6 and 23%, respectively while potash offtake increased by 92.5% over June 2023.

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