KARACHI – As the gas curtailment eases, the production as well as offtake of fertiliser for the month of March 2011 is expected to show abnormal offtake figures due to pre-buying, as from 15 March 2011, the government implemented sales taxes on fertiliser and since fertiliser prices witnessed an increase as they were passed onto the final consumer. On the whole, the fertiliser sector witnessed a growth of 5%MoM in total industry offtakes in the month of February, 2011, and this increase highlights the demand for the fertiliser which is still strong despite the increase in the prices of the commodity by manufacturers. Fertiliser industry witnessed an increase in production during the month of February, up 13 percent in monthly terms.
The major contributor to this increase was FFBL as its DAP production for the month which was up by a massive 112 percent since last month. Furthermore, production of Nitro Phosphate (NP) which went up by an enormous 478 percent compared to last month. Production in the case of Pak Arab fertilisers was limited during the previous month. Nitrogen Phosphorous Potassium (NPK), which witnessed impressive monthly growth of 187 percent owing to an increase in production by Engro Fertiliser.
According to the recent fertiliser figures released by National Fertiliser Development Centre (NFDC) for the month of February 2011, the fertiliser sector experienced production increase of 57,000 tonnes during the month of February and out of that, 80 percent was the contribution was by FFBL (DAP), PakArab (NP) and Engro Fertiliser (NPK).
However, Pakistan’s most widely used fertiliser, urea, was not able to post impressive improvements in production mainly due to gas curtailment. An increase in FFBL’s urea production was witnessed, but this increase can be misleading as the company production was absent during the previous month due to gas supply restrictions. Urea production for the month in consideration improved by three percent only.
Urea offtake went up by five percent monthly, illustrating that the increase in the price of urea (Rs 190 per bag in late December 2010) is settling. However, this increase was massively aided by the offtake in the case of imported fertilisers as it was up by 39 percent, monthly. DAP offtake saw an increase of 17 percent since last month as the Rabi season draws to a close. This increase also highlights the fact that dealers were successful in retiring their inventories during the month of January, as a result fresh demand of DAP was witnessed during February.
On the production front, Engro’s EnVen plant finally received gas supply of 80 MMCFD; the plant is expected to start commercial production by mid April 2011.
