Urea’s precipitous plunge


The urea off-take in the country sharply declined by 37 percent to 263k tons during last month in March. “This is primarily due to delay in Kharif sowing amid unavailability of seeds and relatively higher urea prices,” said Farhan Mahmood of Topline Securities. Interestingly, the analyst said, the sales of local urea during the review month stood at 113k tons, almost one third compared to same month last year. This was primarily due to continuous availability of subsidized imported urea which was available to farmers cheaper than local brands, he viewed. The cumulative figures for Jan-March 2012 show that total urea sales stood at one million tons which remained lower by 16 percent. However, urea sales by local manufacturers stood at 493k tons during this period versus 1.1 million tons last year, down 53 percent. “That is the reason why local manufacturers carried urea inventory of around 535k tons at the end of March 2012 along with 265k tons of urea available with the government,” Farhan said. Following the lower DAP intake in last few months, its sales improved by 40 percent YoY to 46k tons in March. However, during Jan-March 2012, the DAP sales declined by 46 percent to 86k tons due to the fact that where local DAP remained short amid higher winter gas curtailment, declining international DAP prices, since beginning of 2012, led importers to opt for wait and see policy, he said. This led to lower availability of DAP in the market. Moreover, the analyst said, overall fertilizer sales, including urea, DAP and others, stood at 398k tons during the month under review, marking a decrease of 27 percent YoY.