Pakistan’s urea sales in Jun-2022 expected to clock in at 724k tons, up 5% YoY. The same is also likely to be up 74% MoM due to seasonal impact. Urea sales in 1H2022 are expected to clock in at 3,234k tons compared to 2,899k tons in 1H2021, up 12% YoY due to strong Urea demand amid a higher gap between Urea and DAP.

This is likely to take the closing inventory of Urea to around 270k tons in Jun-2022 vs 467k tons in May 2022. 

Amongst the companies, Fauji Fertilizer Company (FFC) is likely to record an offtake of 283k tons in June 2022, followed by Engro Fertilizer (EFERT) of 240k tons, Fatima Group of 98k tons, and Fauji Fertilizers Bin Qasim (FFBL) of 73k tons.

Total DAP sales during Jun-2022 are anticipated to clock in at around 135k tons, up 98% YoY and 43% MoM in anticipation of a further hike in DAP prices. This takes 1H2022 DAP sales to 572k tons, down 5% YoY.

Company-wise data suggests that FFBL and EFERT are likely to record sales of 107k tons and 12k tons, respectively, followed by FFC’s 9k tons.

FFBL’s DAP production is expected at around 75k tons, taking the closing inventory of DAP to about 351k tons.

We continue to have an ‘Overweight’ stance on the Fertilizer sector, with EFERT and FFC as our preferred picks.

Courtesy – Topline Securities