Fauji Fertilizer Corporation (FFC) has reduced urea prices by Rs.145 per bag including of General Sales Tax (GST) to Rs.1650 per bag which will be effective from May 11 (Friday). Stock Analyst, Zaheer Ahmed told APP that the reduction in prices is primarily due to record inventory available with local manufacturers approximately around 0.85 million tons and in addition, imported urea in pipeline which will be available to farmers at a subsidized rate, cheaper than local brand. He believed that the price decline may improve sales of local branded urea whose price gap with imported urea is now being narrowed down to Rs.40-50 per bag after recent reduction in urea prices. “Moreover, other companies of fertilizer sectors including Engro, FFBL and Fatima is also expected to follow by reducing the prices in few days”, he added. “However, the price decline of Rs.145 per bag is expected to reduce the earnings of FFC in current year by Rs1.8 per share, provided new prices remain the same for rest of the year”, Ahmed said.
Besides, the earning of Engro, FFBL and Engro may also be reduced by Rs.2.4, Rs.0.45 and Rs.0.2 per share respectively, if the companies followed by reducing the prices of urea.
