Urea's offtake is reportedly far behind prospects in Kharif 2016 as the economics of growers have worsened due to low price of commodities against the cost of production. Urea consumption is estimated at around 3,000,000 tons against 2,424,000 tons in the previous season showing an increase of 23.8 per cent over last Kharif 2015. DAP offtake is expected to increase by 25.9 per cent over Kharif 2015.
The total offtake of all fertilisers in the previous year was 2,849,000 tons against 3,535,000 tons estimation for forthcoming Kharif 2016 with 24.1 per cent projected increment. In Punjab, urea offtake was recorded at 2,100,000 tons whereas the consumption of DAP was 350,000 tons. In Sindh, urea consumption was 570,000 tons and DAP 105,000 tons. Khyber Pakhtunkhawa's (KP), urea offtake was recorded at 210,000 tons while DAP was 40,000 tons. In Balochistan, urea offtake was 120,000 tons whereas DAP consumption was 25,000 tons.
The sources said that Kharif 2016 started with inventory of 771,000 tons of urea. Total availability of urea will be about 3,471,000 tons of domestic production. Urea offtake is expected to be around 3,000,000 tons. Total availability of DAP will be 709,000 tons against expected offtake of 520,000 tons. According to sources opening inventory of urea in Kharif 2016 (April -September) was 771,000 tons while DAP was 288,000 tons totalling 1,078,000 tons sans imported supplies (which are zero per cent).
Domestic production of urea and DAP was 2,700,000 tons and 421,000 tons respectively totalling 1,078,000 tons. Total availability of urea in Kharif will be 3,471,000 tons and DAP 709,000 tons. "All the domestic fertiliser plants are operating at full capacity due to availability of RLNG and domestic natural gas," the sources said, adding that import of urea in public sector is zero for the last 9-10 months. The stock with the National Fertiliser Marketing Limited (NFML) is sufficient but its offtake is too slow due to which the commodity's stock condition is worsening with each passing day.
The sources said, Pak Arab Fertiliser and Dawood Hercules are operating on Re-gasified Liquefied Natural Gas (RLNG) whereas other fertiliser plants are operating on natural gas. The sale of DAP was better after the government extended subsidy aimed at farmers' purchasing the commodity as per requirements. Chairman National Assembly Standing Committee on Industries and Production, Asad Umar recently wrote a letter to Prime Minister Nawaz Sharif, requesting him to import urea through NFML to provide relief to the farmers.
Umer added that total annual consumption of urea fertiliser in Pakistan is approximately six million tons. Price reduction of Rs 250 per bag will put approximately Rs 30 billion in the farmers' pockets without any cost to the government or an offer of any subsidy. The documents also indicate that the profit of Engro fertiliser increased by 87 per cent to Rs 15.02 billion in 2015 from Rs 8.02 billion in 2014. Likewise the profit of Fatima Fertiliser has increased by 147 per cent to Rs 22.84 billion in 2015 from Rs 9.25 billion in 2014. However, profit of Fauji Fertiliser declined from Rs 18.17 billion in 2014 to Rs 16.76 billion in 2015.
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