Shortage in closing stock of Urea to erode the benefits of GIDC reduction

March 20, 2020 (MLN): The overall urea offtake during February, 2020, was about 460 thousand tonnes, which increased by 18.6 per cent as compared to the same month of last year.

Between October and February, the overall offtake of Urea was about 2567 thousand tonnes which decreased by 2.2 per cent as compared to last year.

Total available urea during February 2020 was 852 thousand tonnes which included 390 thousand tonnes of opening inventory and 462 thousand tonnes of domestic production. Total urea offtake was 460 thousand tones, leaving behind 385 thousand tonnes of urea as opening balance for next month.

Urea offtake during February, 2020 increased by 16, 19, 20 and 50 per cent in Punjab, Sindh, KP and Balochistan respectively as compared to February 2019.

Kharif 2020 is expected to begin with 415 thousand tonnes of opening inventory. Total available urea would be about 3,238 thousand tonnes including 2,823 thousand tonnes of domestic production. Offtake is estimated around 3,048 thousand tonnes.

Thus there will be 190 thousand tonnes of urea stock at the end of the season. Closing stock of urea for August and September is less than 200 thousand tonnes which may result in increase in price of urea eroding the benefit to farming community due to GIDC reduction. Therefore decision regarding either import or operationalization of LNG plants may be taken at the start of Kharif.

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