KARACHI: Fertilizer sales declined by 4 per cent with the off-take at 4.3 million tons for the seven months of the current year (Jan-July) over the corresponding period of the previous year, figures released by the National Fertilizer Development Centre (NFDC) revealed.
Urea and DAP contributed as much as 83 per cent to the total sales. Yet their sales declined by 11 per cent and 19 per cent to 3.2 million tons and 0.44 million tons, respectively.
The sale of urea had continued to show declining trend due to non availability of the product. The reasons for its absence included 7 per cent drop in production over the previous seven months and secondly, the delay in imports, which had plunged by 66 per cent.
The decline in sales of DAP was attributed to higher retail price, which on average had risen by 45 per cent. Other nutrients like CAN and NP (contribute around 13 per cent in aggregate fertilizer sales) and was up by a substantially (50pc) during the period under review, over the same time last year, primarily due to additional production from new plants.
Stand alone figures for the month of July amounted to 759,000 tons of fertilizer off- take, which represented 13 per cent growth over the same month last year.
Interestingly, while the sale of urea was down 9 per cent, DAP made up for the slump in urea sales by an impressive upsurge of 171 per cent. Total off-take remained higher by 15 per cent over the previous month.
Though urea sales declined slightly by 2 per cent in July over June, DAP sales rose by a massive 93 per cent to 132,000 tons. "Higher DAP sales could be linked to continuity of lower availability of urea," said analyst at Topline Securities, Farhan Mahmood.
SECTOR FINANCIALS: Sales of the fertilizer sector increased by 29 per cent to Rs88.32 billion in the first six months of the current year over the same period last year. Highest growth of 51 per cent, over the six months of the previous year, was seen in sales of Fauji Fertilizer Bin Qasim (FFBL).
"Average prices of both key products, urea and DAP rose by 46 per cent and 44 per cent over the first half of the previous year", said Muhammad Sarfraz Abbasi, analyst at Summitcapital.
Total financial cost of the sector rose by 41 per cent mainly because of huge increase of 80 per cent in financial cost of the major producer, Engro.
After-tax earnings of the sector for the six months increased by 44 per cent over the same time last year.