ISLAMABAD: Attractive financial support to farmers in the shape of fertiliser subsidy resulted in higher urea off-take to 1.83 million tonnes, showing an increase of 74 per cent during the second quarter of 2017 (April-June) compared to the same period last year.

“The significant jump in local sale this year is also due to the fact that April-June 2016 had recorded the lowest ever second quarter off-take for almost a decade because farmers and dealers delayed their purchases anticipating the subsidy announcement in the budget,” said Ahsan Ali, researcher at Optimus Capital.

He added the situation was different this year as the budget was announced in the last week of May 2017 and as a result the profitability of fertiliser sector in the second quarter of 2017 is likely to increase by 58pc compared to the previous year and 13pc against the previous quarter.

However, at the same time due to local sales the export front suffered and the industry was able to export110,000 tonnes urea in the period April-June, which is considerably lower than the allocated quota of 600,000 tonnes.

Analyst expects higher urea exports in the third quarter of 2017 that is July-Sept, as the deadline for the export benefits have been extended up to Oct 31, 2017.

Meanwhile, the local sales of diammonium phosphate (DAP) increased by only 9pc in the second quarter of 2017 against the same period of 2016 possibly due to higher left over stocks of the precious quarter.

The DAP sales in the first quarter of 2017 (Jan-March) had shown an increase of 34pc compared to the previous year.

The analyst noted that the removal of price cap on DAP prices also led to slower growth, and expect that DAP off-take would to strong in the period Oct-Dec owing to the wheat crops.

Published in Dawn, July 26th, 2017