Pakistan’s Urea sales in Aug-2023 are expected to clock in at 650k tons, up 18% YoY compared to 552k tons in Aug-2022. This significant YoY growth in Urea sales is due to low sales figures of the previous year, which were impacted by heavy rainfall across the country.

On MoM basis, Urea sales are expected to be up by 3%, compared to 629k tons of Jul-2023 due to seasonal factors.

Urea sales in 8M2023 are expected to clock in at 4,380K tons compared to 4,262k tons in 8M2022, up 3% YoY.

This is likely to take the closing inventory of Urea to around 90k tons in Aug-2023 vs. 175k tons in Jul-2023 due to better Urea sales.

Amongst the companies, Engro Fertilizer (EFERT) is expected to record sales of 230k tons, followed by Fauji Fertilizer Company (FFC) of 200k tons, Fatima Group of 120k tons and Fauji Fertilizer Bin Qasim (FFBL) of 50k tons in Aug-2023.

Total DAP sales during Aug-2023 are anticipated to clock in at around 248k tons, up 854% YoY due to last year’s low base. The same is expected to be up 120% MoM due to seasonal factors. This takes 8M2023 DAP sales to 880k tons, up 30% YoY.

Company-wise data suggests FFBL and FFC are likely to record sales of 180k tons and 35k tons, respectively, followed by EFERT’s 32k tons.

The closing inventory of DAP is likely to be around 45k tons in Aug-2023 compared to 237k tons in Jul-2023.

We continue to have an ‘Overweight’ stance on the Fertilizer sector, with EFERT and FFC as our preferred picks due to their high dividend yield and ability to pass any cost pressures.

Courtesy – Topline Pakistan Research