Urea sales jump 24% YoY in October

November 24, 2021 (MLN): Pakistan’s urea sales surged by 24.4% to 514,000 tonnes compared to 413,000 tonnes in the corresponding months of last year, spurred by supply disruption and higher prices, as per National Fertilizer Development Company (NFDC) data released on Wednesday.

The report noted that the prices of all fertilizer products witnessed an upsurge during October 2021 as opposed to the previous month. The price of 50 kg bag of urea (sona) and urea (other) in the domestic market during the said month increased by 2.5% and 1.3% to Rs1,851 and Rs1,802, respectively over September 2021.

In the international market, the urea prices were quoted at US$ 615-635/t fob bulk China against US$395-500/t of the previous month. Arabian Gulf bulk urea reached a level of US$ 465-505/t.

Province-wise, urea offtake increased by 25% in Punjab and Balochistan each. While it showed a growth of 30% in Sindh. However, its offtake decreased by 14% in KP.

Company-wise data shows that urea sales of Fauji Fertilizer Company (FFC) and Fauji Fertilizer Bin Qasim Limited (FFBL) grew by 28.6% and 33.8% to 203,250 tonnes and 44,399 tonnes when compared to the corresponding period last year.

Urea sales of Engro Fertilizer registered 2.4% growth in the month under review to come to 161,488 tonnes compared to 157,676 tonnes in October 2020.

Outlook

The Rabi 2021-22 season started on a positive note with an opening inventory of 116,000 tonnes of urea. The total availability of urea would be around 3,304,000 tonnes comprising of 3,088,000 tonnes domestic production. Urea offtake during Rabi 2021-22 is estimated at around 3,195 000 tonnes leaving behind a closing inventory of 107,000 tonnes at the end of the Rabi season.

The closing inventory from December 2021 onward is below 200,000 tonnes which reflects a very tight situation. The report highlighted that government should ensure the provision of additional gas to the FFBL plant and import 100,000 tonnes on a fast-track basis to combat the shortage.

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