AHL Research reports that Pakistan’s fertilizer sector delivered a mixed performance in 2QCY26, with urea sales showing strength while DAP demand remained under pressure. Urea offtake rose 18% YoY to 1,474k tons, supported by record April sales, which marked the second-highest April on record. This rebound followed weaker demand earlier in the year, driven by elevated dealer inventories after the strong Rabi season.

Analysts note that April’s surge also reflected dealer pre-buying ahead of anticipated price hikes, in line with rising input costs and higher international urea prices. However, demand moderated in May and June, resulting in subdued offtake toward quarter-end.

Industry inventories remained broadly stable at 844k tons as of June 2026. EFERT held the largest share at 77%, reflecting slower sales, while FATIMA accounted for 21% and FFC just 2%, highlighting stronger turnover at FFC.

In contrast, DAP offtake fell 37% YoY to 192k tons, as international prices surged 26% QoQ to USD 887/ton, widening margins but discouraging farmer demand. Substitution toward cheaper nitrogen-based fertilizers was evident, with stronger urea and CAN sales.

Company outlook: EFERT is expected to post earnings of PKR 2.43bn (EPS: PKR 1.82), down 56% YoY, with market share slipping to 18% and DAP offtake plunging 69% YoY. FFC earnings are projected at PKR 21.3bn (EPS: PKR 14.82), up 22% QoQ, supported by higher urea sales and improved margins. A dividend of PKR 11/share is anticipated.

AHL Research concludes that global price trends and input costs will remain key drivers for sector dynamics in the coming quarters.