KARACHI: Sales of fertilisers posted a strong growth of 27 percent year-on-year (YoY) to 570,000 tons in April as urea demand continued to surge on prospects of price hike, a brokerage reported on Monday.
In April, urea sale sharply rose 50 percent year-on-year to 375,000 tons. But, sales of diammonium phosphate (DAP) fell 28 percent to 69,000 tons during the month as compared to the corresponding month a year earlier.
“We attribute surge in urea off-takes by 50 percent YoY and 10 percent MoM (month-on-month) amid higher demand from dealers on account of anticipated increase in urea prices,” Waqas Ahmed, an analyst at Taurus Securities said.
Taurus Securities, citing data of the National Fertilizer Development Centre, said sales of urea surged 45 percent to 1.63 million tons, while DAP sale increased six percent to 434,000 tons in the January-April period over the same period last year.
In April, urea inventory rose 15 percent month-on-month to 436,000 tons to meet higher upcoming seasonal demand. DAP inventory, however, fell 12 percent to 190,000 tons during the month under review over the previous month.
“Comfortable inventory levels of urea and DAP have improved pricing power for local fertiliser manufacturers, as a result average urea prices increased 4.7 percent MoM (in April),” Ahmed said. Currently, international urea and DAP prices are hovering around $240 and $385 a ton, respectively and “are expected to remain steady, which along with removal of price capping (Rs1,400/bag) from urea would provide an added advantage to the local manufacturers,” he added.
