Fertilizer offtakes surge 42% in September as Rabi season demand builds; AKD Securities remains bullish on sector. Fertilizer offtakes posted a strong recovery in September 2026, driven by channel inventory build-up ahead of the Rabi sowing season, government support measures, improved product availability and expectations of higher crop cultivation, according to a report by AKD Securities Limited.
The brokerage noted that urea sales jumped 42% year-on-year to 611,000 tonnes during the month, supported by dealer stocking activities, subsidy and incentive schemes announced by the Punjab and Sindh governments, company-backed dealer financing, and a low base effect stemming from sales disruptions witnessed earlier in the year. Cumulative urea offtakes during the Kharif season rose 8% year-on-year to 3.4 million tonnes.
As demand strengthened, industry urea inventories fell to 643,000 tonnes at the end of September from a recent peak of 971,000 tonnes in May 2026.
In contrast, DAP sales fell 30% year-on-year to 68,000 tonnes in September, while cumulative Kharif season offtakes fell 25%. AKD Securities attributed the decline primarily to sharp increases in local DAP prices following tensions in the Middle East, with prices reaching an all-time high of around Rs17,000 per bag.
Among major producers, Engro Fertilizers (EFERT) recorded the strongest performance, with urea sales more than doubling year-on-year to 218,000 tonnes, lifting its market share to 35% from 24% a year earlier. The company also posted a fivefold increase in DAP sales, driven by a low base.
Fauji Fertilizer Company (FFC) reported urea sales of 261,000 tonnes, up 10% year-on-year, although its market share eased to 43% from 55% a year earlier as competitors regained lost ground. FFC’s DAP sales declined 44% year-on-year to 34,000 tonnes. However, the company still held the largest share of DAP inventory, with 180,000 tonnes, or 69% of industry stocks.
Fatima Fertilizer also posted a strong recovery, with urea sales doubling to 102,000 tonnes and its market share rising to 17% from 12% a year earlier. The company’s CAN sales rose 43% year-on-year, while NP sales declined 17%.
Looking ahead, AKD Securities expects urea demand momentum to continue, forecasting total CY2026 urea offtakes of about 6.5-6.7 million tonnes. The brokerage maintained its overweight stance on the fertilizer sector, citing stable earnings prospects, strong cash flows and attractive dividend yields.
“FFC remains our top pick,” AKD Securities said, assigning a December 2026 target price of Rs801 per share.
