LAHORE - As per preliminary figures for September 2014, urea offtake has clocked in at 380,000 tons, down 25 per cent annually and 40 per cent monthly. The decline in urea offtake is because of recent floods in the country.

Company-wise details of September 2014 urea offtake reveals an overall negative trend for local urea producers, where Fauji Fertilizer Company (FFC), Fauji Fertilizer Bin Qasim (FFBL), Engro Fertilizer Limited (EFERT) and Fatima Fertilizer (FATIMA) reported urea offtake of 150,000 tons (-28%YoY and -35%MoM), 12,000 tons (-8%YoY and -52%MoM), 150,000 tons (-8%YoY and -10%MoM), and 18,000 tons (-50%YoY and -56%MoM), respectively. On the other hand, imported urea sale accounted for only 30k tons. Note that in 9M2014, EFERT sales witnessed growth (+24%YoY) which supported the overall sales figure for domestically produced urea (0%YoY), whereas decline in sale of imported urea dragged the overall urea offtake in the country (-3%YoY).

According to data, Pakistan’s urea offtake including local and imported declined by 4 percent to 3.15 million tones in seven months of 2014 as compared to 3.17 million tones in the same period of 2013, said National Fertilizer Development Centre (NFDC). Only in the month of July 2014, the urea offtake registered a decline of 5 percent Month on Month (MoM) basis to 487000 tones as against 512000 tones in month of June 2014, with local manufacturers, witnessing a decline in their offtake levels, while increase was witnessed in imported Urea offtake which posted a significant jump of 3x to 67000 tones in July 2014. On the other hand, Di Ammonium Phosphate (DAP) offtake registered a significant increase of 1.4x MoM, clocking in at 145000 tones.

This substantial growth is due to lower base effect as announcement of subsidy of Rs 400/bag in FiscalYear2014-15 (FY15) budget restricted the purchases during June’ 2014, Taurus Research analyst said. A three bench tribunal comprised of Supreme Court judges declared imposition of Gas Infrastructure Development Cess (GIDC) unconstitutional and stated to refund the amount in a reasonable time which has been collected so far.

Fatima remained the only local urea manufacturer which managed to show decent urea sales in July 2014 and registered an increase of 8 percent MoM to 49000 tones, while Fauji Fertiliser Bin Qasim Limited (FFBL) recorded a sharp decline of 34 percent MoM, followed by Engro Fertiliser and Fauji Fertiliser Company (FFC) which posted a dip of 20 percent MoM (155000 tones) and 16 percent MoM (189000 tones), respectively is pertinent to mention that, decline in offtake levels of urea is attributable to higher sales volumes of imported urea which were up by 3x to 67000 tones.