Fertiliser offtake registered a decline of 2 percent year-on-year (YoY) to 7.8 million tons during the first eleven months of current calendar year 2010. According to National Fertiliser Development Centre's (NFDC) latest report, fertiliser offtake statistics showed total fertiliser sales rising by 38 percent YoY to 1.2 million tons in November 2010, mainly owing to a phenomenal 76 percent YoY rise in urea sales. DAP sales; on the other hand, declined by 36 percent.
In January-November of 2010, DAP and urea offtake fell by 19 percent YoY and 1 percent YoY, respectively. "DAP offtake during eleven months of 2010 remained low, as it decreased by 19 percent YoY to 1.2 million tons and a major factor behind the fall was the high DAP prices throughout 2010 (average DAP prices are up 23 percent YoY), said Bilal Qamar, an analyst at JS Global.
In November alone, offtake declined by 36 percent YoY and 52 percent MoM to 0.180 million tons, he said, adding that MoM decline was largely on account of pre-buying, witnessed in October, on price raise fears. Going forward, he said, "we believe the offtake to slow down further as fertiliser manufacturers have raised their prices again by Rs 100 per bag during December".
The company-wise break-up shows FFBL's sales rising by 41 percent, while that of Engro declined by 50 percent during November. Despite gas curtailment since April 2010, urea offtake in January-November declined by a mere 1 percent, to 5.6 million tons. On monthly basis though, sales volume witnessed an impressive turnaround to register a growth of 106 percent, to 0.879 million tons in November.
Gas curtailment still remains a major concern for fertiliser manufacturers. However, the recent price hike of Rs 190 per bag of urea is more than enough to offset any production losses, Bilal said. The enhanced gas curtailment to 20 percent and 12 percent from Sui and Mari networks respectively will surely cause the industry supply to fall below the expected demand of 6 million tons in 2011, inducing the government to import more urea than anticipated earlier, he added.