Pakistan saw urea offtake declined but DAP increased in October 24 amid surge in proudction: IMS Research

NFDC reported October 2024 urea offtake at 358,000 MT, down 22% YoY from 459,000 MT SPLY. While offtakes declined, production increased by 10% YoY, leading to the highest inventory buildup the industry has experienced since May 2020, which was recorded at 841,000 MT. Meanwhile, DAP offtakes experienced a strong recovery of 95% YoY at c.309,000 MT from c.159,000 MT SPLY. This surge in demand was largely driven by bulk buying ahead of wheat cultivation.

Combined, § Urea offtakes for FFC and FFBL remained stable YoY at c.179,000 MT. This takes their 10MCY24 offtakes to 2.5mn MT, up 6.5% YoY, while industry offtakes dropped 8.8% YoY. EFERT’s urea offtakes dropped 42% YoY to c.99,500 MT, taking 10MCY24 offtakes to 1.5mn MT, down 21% YoY.

§ Urea’s closing inventory surged to c.841,000 MT at the end of October 2024, reflecting a 5.4x increase YoY. This marks the highest urea inventory level since May 2021. FFC and FFBL collectively account for 20% of the industry’s closing urea stock, while EFERT holds a larger share of 36%.

§ DAP offtake rose by c.95% YoY to c.309,000 MT in October 2024, mainly attributed to bulk buying of DAP amid the start of wheat cultivation. Combined, DAP offtakes for FFC and FFBL were recorded at c.155,000 MT, up 70% YoY. EFERT DAP offtakes came in at c.49,000 MT, up 90% YoY.

We expect a seasonal pickup in fertilizer demand for November 2024 owing to the start of the Rabi season; however, overall demand may remain strained due to weak agronomics resulting from a substantial decline in cotton production. We reiterate our Neutral stance on FFC and EFERT.

Urea
(‘000 MT)	Oct-24	Oct-23	YoY	10MCY24	10MCY23	YoY
Opening Inventory	622	77	711%	104	250	-58%
Production	590	537	10%	5,532	5,302	4%
Import	–	–	0%	173	–	0%
Available	1,212	614	97%	5,809	5,552	5%
Offtake	358	459	-22%	4,932	5,404	-9%
Closing Inventory	841	156	439%	841	156	439%

DAP
(‘000 MT)	Oct-24	Oct-23	YoY	10MCY24	10MCY23	YoY
Opening	383	38	912%	25	436	-94%
Production	77	72	6%	695	516	35%
Import	156	172	-9%	841	324	159%
Available	616	282	118%	1,561	1,276	22%
Offtake	309	159	95%	1,240	1,160	7%
Closing Inventory	307	122	152%	307	122	152%