According to official data released by NFDC, urea off-take grew by 220% MoM to 381kT as against 119kT recorded during Oct’19. Bulk of the recovery can likely be attributed to the seasonal increase in demand ahead of the wheat sowing season. Moreover, Oct’19’s low base was a result of uncertainty regarding the GIDC ordinance, causing dealers to anticipate a reduction in urea prices and consequently, delay their purchases.

For Dec’19, we anticipate another monthly surge in urea off-take as dealers are expected to pre-purchase urea in bulk ahead of the eventual gas price hike. While urea inventory has crossed the 1mn MT mark, we anticipate urea inventory to register around 600kT by the end of CY19 on account of Dec’19’s anticipated off-take.

On a cumulative basis, urea off-take slowed down by 4% YoY to 4,883kT during 11M CY19. The overall slowdown in urea sales during the year can likely be attributed to muted crop yields. Furthermore, uncertainty regarding Urea’s pricing levels likely caused dealers to postpone their purchases till the volatility subsides.

During 11M CY19, FFC’s market share fell by 4pps to 40% while EFERT’s market share also declined by 4pps to 31%. This decline in the listed fertilizer’s market share is likely due to the influx of RLNG-based urea manufacturers.

Like Urea’s, DAP off-take also benefitted from the seasonal increase in demand, recording a growth of 49% MoM to 404kT. On a cumulative basis, however, DAP off-take declined by 10% YoY to 1,838kT during 11M CY19 likely due low agricultural yields.

FFBL’s market share recorded at 35% during 11M CY19 with off-take of 640kT (+5% YoY). Meanwhile, EFERT’s and FFC’s imported DAP off-take fell by 21% YoY and 51% YoY, respectively. (Courtesy: BMA Capital Management Ltd.)