Pakistan’s urea sales in August 2024 are expected to be 555k tons, down 15% YoY compared to 650k tons in August 2023. Owing to rains, the same is expected to be down 9% MoM. Meanwhile, urea sales in 8M2024 are expected to clock in at 4,204k tons compared to 4,381k tons in 8M2023, down 4% YoY.

This is likely to reduce the closing inventory of urea to around 399k tons in August 2024, compared to 87k tons in August 2023 and 399k tons in July 2024.

Among the companies, Fauji Fertilizer Company (FFC) is expected to record sales of 193k tons in August 2024, followed by Engro Fertilizer (EFERT), which will sell 165k tons, Fatima Group, which will sell 129k tons, and Fauji Fertilizer Bin Qasim (FFBL), which will sell 53k tons.

Total DAP sales during August 2024 are expected to be around 82k tons, down 27% YoY. Due to the same reason mentioned above, the same is expected to be down 50% MoM. This takes 8M2024 DAP sales to 790k tons, down 12% YoY.

FFBL and EFERT are anticipated to record sales of 53k tons and 10k tons, respectively, followed by FFC’s 4k tons.

The closing inventory of DAP is expected to be around 219k tons in August 2024, compared to 39.8k tons in August 2024 and 102.6k tons in July 2024.

We continue to be ‘Overweight’ in the Fertilizer sector, with FFC and EFERT being our preferred picks due to their high dividend yield and ability to withstand any cost pressures.

Courtesy – BMA Research