The production of country’s premier fertilizer, urea, witnessed a decline of 15 percent YoY during calendar year 2012.
Such has been the impact of gas curtailment on urea production, especially on the plants that are supplied gas through Sui Northern Gas Pipelines (SNGP) network, said analysts at InvestCap Research.
The production of the sector contracted by 734,000 tons in volumetric terms, they said.
Likewise, the analysts said the CAN production also declined by a massive 21% YoY to 475,000 tons. DAP production on the other hand was not as severely impacted by gas issues and came down by 1.9 % YoY to 645,000 tons compared to last year.
During CY12, urea off-take posted negative growth of 12%YoY to 5.2 million tons as compared to 5.92 million tons in CY11. Such a large decline was attributed largely to the ever increasing urea prices, on average reaching Rs 1,740 per bag- up by 22% YoY.
However, DAP take off registered a growth of 6.2% YoY to 1.19 million tons during the said period as its selling price increased by only a nominal 2.1% YoY to Rs3,946 per bag.
Moreover, NP posted record sales of 491,000 tons (a 47% rise YoY) as production from Fatima Fertilizer improved sales volume of said fertilizer. With low production of fertilizer on the local front, as a whole the local industry is losing share in the market to rising imports. Urea lost its market share by 4pps YoY to 79%, local DAP reduced its contribution in total sales volume by 7pps YoY to 51% in CY12. Going forward, the analysts said, any positive news on supply of gas will play a vital role as far as fertilizer production was concerned.
However, the implementation of gas supply from the new gas fields still remains a question mark.