KARACHI - The fertilizer offtake stood at 7.1 million tons during Jan-Oct 2009, up by 23 per cent compared to 5.8 million tons last year. This increased demand was driven primarily by expectations of bumper crop yields during the current season. According to the latest data released by the National Fertilizer Development Centre (NFDC), Cumulative DAP offtake during 10M2009 surged by a massive 127 per cent to 1233 k tons from just 543k tons last year. The surge in DAP offtake is attributable to lower DAP prices during the year which currently stand at Rs1910/bag compared to Rs3050/bag last year. However, due to a major government subsidy and lower inventories with the farmers during the last 3-4 months in 2008, offtake in the month of October (2009) was 45% lower than October 2008 offtake of 252ktons. Despite higher urea prices, a similar trend was observed in urea sales as offtake for 10M2009 stood at 5064k tons compared to 4469k tons in the corresponding period last year, up 13%YoY. The increase in urea offtake is very encouraging given the fact that average prices have risen by 9% since the start of the year. However on a monthly basis, offtake declined by 4% to 429ktons, as major procurement for the Rabi season was carried out in the past couple of months. A comparison shows that urea inventory is still lower by 57 per cent and 67 per cent respectively when compared to October 2007 and October 2006 levels. With peak urea demand expected during Nov-Jan in the wake of higher expected wheat sowing, the call for timely imports to meet any shortfall is still imminent. Therefore further price hike owing to shortage can be avoided as price increase due to expected rise in gas tariff is already anticipated post Jan-2010, stated analyst Farhan Bashir at InvestCap Research. So far, urea and DAP prices remained flat during the month, which could be indicative of the comfortable supply situation, he added. At the import front urea was relatively calm as MoM decline of 51 per cent in NFML offtake was observed. While FFC still remained dormant, Engro and FFBL turned out quick to make up for the gap which was shown by 16 per cent and 37 per cent MoM increase in their respective urea offtake.