KARACHI: Urea off-take during IQCY21 swelled by 37 per cent to 1.398 million tonnes from 1.024m tonnes in the same period last year.

Urea sales jumped by 13pc to 343,000 tonnes in March from 302,000 tonnes in March 2020.

Robust growth of 81pc was seen in DAP off-take to 144,000 tonnes during March from 79,000 tonnes in March 2020 while IQCY21 DAP sales showed a jump of 49pc to 314,000 tonnes versus 211,000 tonnes in the same period last year.

The country’s urea inventory situation during March was 50pc down to 298,000 tonnes as compared to 592,000 tonnes in March 2020, BMA Capital Research analyst Noor Huda Shaikh said while quoting fertiliser figures of the National Fertiliser Development Company (NFDC).

He said improvement in urea sales during the period is mainly on account of better farm economics, and a low base effect (0.30m tonnes in March 2020) as the decline in Engro Fertiliser’s urea sales (18,000 tonnes) in same period last year dragged down the cumulative industry volumes in March 2020.

The inventory level of urea during the end of March is still relatively lower compared to March 2020. Despite the resumption of LNG-based fertiliser plants, he estimated the year-end urea inventory to clock in near 0.35-0.40m tonnes, keeping the pricing power of fertiliser players intact.

He recalled that GIDC elimination during 1QCY20 led to a decline in urea prices by Rs300 per bag. However, Engro Fertiliser lagged behind in passing on the benefit to end consumers due to its concessionary gas pricing, which dampened its off-take during the same period.

Published in Dawn, April 24th, 2021

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