Urea sales see double-digit decline in April

KARACHI: Urea sales are estimated at 240,000 tons in April, showing a double-digit decline compared to the corresponding month a year earlier and the previous month, as the virus lockdown hurt its sales during the month, a brokerage reported on Monday.

Urea sales fell 18 percent from 292,000 tons in April 2019 and dropped 21 percent from 303,000 tons in March 2020, according to Topline Research, citing data of National Fertilizer Development Centre.

Analyst Sunny Kumar attributed the drop to lockdown across the country amid the COVID-19 outbreak. The government imposed lockdown back in late March to curb local transmission of the novel coronavirus, bringing the economic activities down. Shops and industrial units remained widely closed for one and half months with the situation slowly coming back to normal.

In January-April, urea sales fell 23 percent to 1.3 million tons. That was compared with 1.7 million tons in the corresponding period a year earlier.

Sales of diammonium phosphate (DAP) are estimated at 140,000 tons compared to 86,000 tons in April, showing a 62 percent year-on-year growth and increasing 77 percent month-on-month.

Amongst the companies, Fauji Fertilizer (FFC) is expected to post increase in urea sales by 33 percent year-on-year to 118,000 tons during April. On the other hand, Engro Fertilizer (EFERT), Fauji Fertilizer Bin Qsim (FFBL) and Agritech are likely to post decline of 45 percent, 37 percent and 89 percent year-on-year to 78,000, 18,000 and 1,000 tons in their urea offtakes in April.

In January-April, FFC and FFBL saw urea sales increase 9 percent and 78 percent, respectively.

EFERT and Agritech witnessed downward trend of 57 percent and 82 percent, respectively.

DAP sales are expected to increase in April for every firms. FFC’s DAP offtake rose 94 percent year-on-year and 40 percent month-on-month, respectively. EFERT saw increment of 143 percent and 114 percent and FFBL 159 percent and 53 percent.

FFBL and EFERT are anticipated to record sales of 66,000 and 35,000 tons, respectively, followed by FFC (sales of 9,000 tons during April). FFBL’s DAP production is expected at 41,000 tons, taking closing inventory of DAP to around 425,000 tons.

In 4M2020, DAP sales are likely to increase by 28 percent year-on-year to 351,000 tons. That was compared to 275,000 tons.

Despite the lockdown, urea production in April remained unaffected and is expected to increase two percent year-on-year at 503,000 tons, taking urea closing inventory to around 855,000 tons.