Hollow fertilizer growth

Urea off-take in May 2016 was at a 15-year low for the monthly figure at just quarter million tons. That for the first five months of CY16 was at a slightly better 14-year low. For the eleven months starting July 2015, it records another decade low. And surprisingly, it is not even surprising, as urea sales for June are expected to be even weaker.
Much of it owes to delayed buying in anticipation of relief package in the budget. And it sure did come in the form of subsidy on urea and DAP. Another story how the budget documents do not talk about any direct subsidy to urea or DAP. The subsidy is going to be in form of reduced GST, which is set to reduce prices substantially, and part of it is also going to be shared by the local players.
Yes, the urea off-take will surely pick come July, but new lows may well have been found already. Recall that Pakistan has been recording a decline in urea off-take annually for five consecutive years. Pakistan is an agri-based economy, so we are told. Static yields, declining fertilizer application, bad crops, and poor farm economics is what the agriculture sector has been reduced to of late.
It is not all about lows in the fertilizer numbers - the inventories are at an all-time high of 1.77 million tons, or nearly average three-month off-take. That will surely go down as prices go down and pricing clarity arrives - but it would require nothing short of a miracle to beat or even get closer to previous year annual urea off-take number - subsidy or no subsidy.
All this while, we have been told how the fertilizer sector has contributed greatly to the GDP via its contribution in the LSM index. And so it has. The plants have been made more gas available for much of the period, and increased production followed. Only ironic that it coincided with horrid farm economics and dwindling fertilizer off-take. Fertilizers was the second largest contribution of around 0.71 percentage point in the 4.7 percent LSM growth for the outgoing fiscal year. If there was ever an apt description of hollow growth - this fertilizer production-offtake mismatch is right up there.