KARACHI: The sales of urea have climbed up by 19.2 percent to 447,000 tons during for the month of October 2018 as compared with 375,000 tons in the same month of the last year.
However, the sales have come down by 7 percent when compared with 482,000 tons in the month of September 2018.
Analysts at Arif Habib Limited attributed decline on a monthly basis is owing to pre-buying in the prior month amid expected urea price hike post gas tariff increase.
In particular, FFC and FFBL’s cumulative urea off-take recorded an increase of 5 percent Year on Year (YoY) to 248,000 tons in October 2018 while declining by 16 percent on a Month on Month (MoM) basis.
Similarly, EFERT’s urea off-take underwent a growth of 13 percent YoY but dropped by 16 percent MoM to 141,000 tons in October 2018. Whereas FATIMA’s sales escalated by a stunning 8x YoY and 2.8x MoM in October 2018 to 40,000 tons.
On a cumulative basis, urea off-take posted a meager increase of 1 percent YoY during first ten months of current financial year. Pertinently, company-wise data reveals that EFERT outperformed its peers with a 15 percent YoY jump in urea off-take during 10MCY18.
DAP sales depicted a 29 percent YoY and 150 percent MoM increase to 498,000 tons during October 2018. Whereas during 10MCY18, DAP sales exhibited a 2 percent YoY increase to clock-in at 1,760,000 tons.
On a company specific basis, DAP offtake of FFC and FFBL arrived at 222,000 tons in October 2018, translating into a YoY cut of 4 percent while up 111 percent MoM.
On the other hand, EFERT’s DAP sales registered an uptick of 130 percent YoY and 258 percent MoM in October 2018 to 178,000 tons.
By the end of October 2018, closing inventory of urea with local producers stood at 176,000 tons. Meanwhile, tally for DAP suggested an inventory position of 467,000 tons in the same period (FFBL + FFC, EFERT and Pvt Importers held approximately 307,000, 57,000 and 40,000 tons, respectively).
Minimum inventory levels tagged with better pricing power of manufacturers along with stable offtake will be positive for the sector in the short to mid-term.
The recent price hike of Rs128/bag during last month will be broadly positive for EFERT and neutral for FFC and FFBL, the analysts said.