January-June urea offtake declines

July 30, 2013


Urea offtake witnessed a slight decline of one percent during the first six months of current calendar year 2013. According to National Fertilizer Development Centre (NFDC) on a cumulative basis, urea offtake during six months of 2013 stood at 2.71 million tons compared to offtake of 2.75 million tons during the same period last year, showing a slight decline of 1.5 percent YoY.

However with the start of the Kharif season urea sales have been increasing gradually and Month on Month (MoM) basis the country’s total offtake witnessed a jump of 17 percent during June 2013, in which urea offtake stood at 567,000 tons. Year on Year (YoY) basis it posted a massive decline of 45 percent in Jun 2013.

Analysts said this huge decline during Jun 2013 is an outcome of aggressive buying by dealers in the wake of upward price revision expectation last year during June 2012. The total availability of urea during June 2013 was 736,000 tons, which consisted of 304,000 tons of May 2013 closing stock, 382,000 tons of domestic production and 50,000 tons of imported urea. With the offtake of 567,000 tons, closing balance of June 2013 now stands at 164,000 tons.

Offtake of DAP during June 2013 increased by 56 percent YoY to 150,000 tons as compared to off-take of 96,000 tons during the same period last year. On a monthly basis, total DAP offtake improved by a massive 87 percent compared to offtake of 80,000 tons witnessed during May 2013. FFBL – the only producer of DAP – offtake increased by 40 percent MoM to 76,000 tons compared to 54,000 tons during previous month. Similarly, imported DAP offtake increased by an enormous 181 percent MoM to 74,000 tons during the month compared to 26,000 ton witnessed a month earlier.

With the production of 68,000 tons and imports of 88,000 tons, the total availability of DAP stood at 377,000 tons as opening balance remained at 221,000 tons. After the offtake of 150,000 tons the closing inventory stands at 227,000 tons. Analysts said in recent days, the major concern for the fertiliser sector has been the speculated upon substantial gas price hike, which is yet to materialise due to Prime Minister’s directive to wait till August (likely post-Eid). In the current international urea price and supply scenario, complete pass-through of incremental gas cost by domestic producers appears to be a challenge, they added. Courtesy:Business Recorder

Published in ZaraiMedia.com

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