Research Updates

Sector Update
26/11/18

Short Description
The official fertilizer statistics has been released by NFDC for the month of Oct’18 in which Urea offtakes highlighted a growth of 26.93% Y/Y (?3.6% M/M)

Detail Description
The official fertilizer statistics has been released by NFDC for the month of Oct’18 in which Urea offtakes highlighted a growth of 26.93% Y/Y (?3.6% M/M), while at the same time, production also showed a parallel growth of 23.89% Y/Y (?19.9% M/M), the hike in demand can be attributed to the start of Rabi season
Future Outlook:

Rabi season sowing has been started, as depicted by an average increase of 29% in Urea and DAP offtakes compared to Oct’17. While on the other hand, Federal government is planning to start gas load-shedding in Sindh for three months starting from Dec’18 which remains a risk for FFBL in particular as Mari based players are not likely to affected.
The Urea prices for the month under observation showed an increase of around PKR60/bag M/M and is now hovering at PKR1,706/bag. While, prices of DAP in the local market are now at PKR3,520/bag up by PKR92/bag M/M. Increase in prices of feed and fuel gas prevented manufacturers to sell fertilizers on subsidized rates while, as per news reports, the GoP has reviewed gas prices for fertilizers aiming to reduce local urea prices at PKR1,650/bag level.
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