KARACHI - Despite being an off peak season, the YoY growth in DAP off-take has increased by 67 percent in the month of May, 2009, The Nation has learnt. Conversely, Urea off-take showed a decline of marginal 2 percent YoY. As per the statistics compiled by National Fertilizer Development Centre (NDFC), the DAP off-take continued to surprise upwards to 95,000 tons (+ 67 percent YoY) in May 2009, despite excess supply and expected decline in domestic prices. Moreover, despite low inventory levels and limited supply urea off-take remained rather steady as it was recorded at 466 thousand tons, up 10 percent MoM in May. As a result, overall urea off-take for the 5M2009 remained strong at 2.4mn tons (up 7 percent YoY), while DAP off-take over the same period was up a massive 114 percent YoY at 334 thousand tons. Given the cyclical nature of the fertilizer utilization, Apr - June generally remain a lull period as procurement activity for the Rabi seasons kicks off around July while procurement for Kharif is generally completed during the first quarter. Despite May being an off peak period, provision of excess supply and expected decline in domestic prices (amid sharp fall in international prices), DAP off-take remained strong at 95 thousand tons up a massive 94 percent MoM and 67 percent YoY. Though, international DAP prices hovered at US$ 280-320/ton (Rs 1,100 -1,300 per bag), major domestic players such as FFBL and Engro kept prices unchanged i.e. around Rs 1,900 per bag. FFBL and Engro managed to sell 54,000 tons and 7,000 tons, respectively in May amid alleged reports of distributors taking advantage of urea shortage and forcing buyers to buy one bag of DAP for every 4 bags of urea. Encouragingly, FFBL has sold 192 thousand tons of DAP in 5M2009. Resultantly industry off-take in 5M2009 reached 334 thousand tons (up 114 percent YoY). With DAP inventories now on the lower side (102 thousand tons as of May 2009), there would be a natural shift towards imports particularly from major player such as Engro. Hence prices are expected to fall by around 20 percent in the coming months and average Rs1,500-1,600/bag in 2H2009. On the back of declining DAP price outlook, experts expect a robust DAP consumption, which entails better fertilizer mix and would help sustain bumper crop for next year - a welcome boost to both agriculture and overall economy. A combination of improved production particularly by Engro and anticipated delays in urea imports resulted in improved demand from buyers reflected by 10 percent MoM increase in urea off-take, which stood at 466k tons in May 2009. As a result, the total off-take in the 5M2009 stood at 2.4mn tons up 7 percent YoY. Amid better production statistics, Engro off-take for May was recorded at 75 thousand tons up 77 percent MoM, while FFCs off-take remained steady at 213 thousand tons. On the flip side, urea off-take was down a marginal 2 pc YoY.