Urea offtakes for May 2025 came in at c. 418,000, up 5% YoY. This results in 5MCY25 Urea sales of approximately 1.8 million metric tons, down 31% from 2.6 million metric tons in the same period last year. Meanwhile, DAP offtakes for May 2025 rose to c. 95,000 MT vs 41,000 MT last year, taking the 5MCY25 DAP sales to c. 340,000 MT vs 432,000 MT in 5MCY24, down 21% YoY. We believe farm economics remain under pressure, and the increase in fertiliser sales during May 2025 was likely preemptive, driven by expectations of a potential rise in the Federal Excise Duty (FED) under the Finance Bill FY26. However, the government has since opted to maintain the status quo on duties applicable to the fertilizer sector.
Key highlights:
§ FFC: Fauji Fertilizer reported Urea offtakes of c. 207,000 MT, down 28% YoY. This results in 5MCY25 Urea sales of approximately 853,000 MT, down 36% year-over-year. Meanwhile, DAP sales for May 2025 rose to approximately 69,000, up 2.2 times year-over-year (YoY), taking 5MCY25 sales to approximately 211,000 metric tons (MT), down 30% YoY. FFC’s Urea/DAP market share in May 2025 stood at 50%/72%.
§ EFERT: The Company recorded urea off-takes of approximately 142,000 MT, up 86% year-over-year. The extraordinary growth is attributed to the low-base effect resulting from last year’s major turnaround at the Enven plan, which lasted for almost two months. This results in 5MCY25 urea off-takes of approximately 483,000 MT, down 38% year-over-year. DAP offtakes were recorded at approximately 14,000 MT in May 2025, compared to 2,000 MT in the previous supply year. EFERT’s urea/DAP market share was recorded at 34% and 15%, respectively.
§ Closing Inventory: The Industry’s Urea inventory rose to 1.3mn MT in May 2025, the highest in the last eight years. FFC and EFERT contributed 27% and 43%, respectively.
Fertiliser offtake witnessed a modest uptick in May 2025, which we believe may be a one-time occurrence, given that farm economics remain under strain. Meanwhile, industry-wide Urea inventories are accumulating rapidly, which potentially prompts the government to consider allowing exports. If this happens, it could be a major trigger for EFERT. Historically, however, exports have been allowed after assessing the situation for one agricultural cycle (Kharif and Rabi seasons).
Courtesy – IMS Research
