Islamabad May 15 2024: In April 2024, Pakistan experienced a significant downturn in Urea offtake, hitting a three-year low at 328 thousand tonnes, marking a decline of 19.7%. This decline was attributed to a notable slump in wheat prices, which saw a nearly 25% decrease as harvesting commenced across the country.
Conversely, DAP offtake surged to 93 thousand tonnes, marking an impressive increase of 82.5% compared to April 2023 figures, as reported by the National Fertilizer Development Centre.
The overall nutrient off-take saw a decline of 6.3%, totaling 244 thousand tonnes. This decline was primarily driven by decreases in nitrogen and potash off-take by 16.1% and 15% respectively, whereas phosphate off-take surged by 59.8%.
In terms of production, total domestic fertilizer production in April 2024 amounted to 754 thousand tonnes, with urea and DAP production reaching 524 and 66 thousand tonnes, respectively. Other products such as NP, CAN, SSP, NPKs, and SOP also contributed to the production, albeit in smaller quantities.
Imported Supplies and Pricing Trends
Imported supplies stood at 93 thousand tonnes, comprising various fertilizers including DAP, AS, SOP, and MOP. Pricing trends varied across different fertilizer types. While nitrogenous fertilizer prices saw a slight increase, phosphate prices (except SSP) experienced a decrease during April 2024. For instance, urea prices saw a marginal increase, whereas DAP prices witnessed a slight decrease over the previous month.
Global Market Insights
Internationally, there was a declining trend in urea prices in the Arabian Gulf region during April 2024. Prices were quoted at US$ 291-315 and US$ 280-335 per tonne FOB bulk for China and Arabian Gulf, respectively. DAP prices also showed variation, ranging from US$ 492-649 per tonne FOB bulk in Australia and US$ 520-570 per tonne FOB in China.
Supply and Demand Forecast
Looking ahead to the Kharif 2024 season, estimates suggest a total urea availability of 3,225 thousand tonnes, with a revised off-take estimate of 3,339 thousand tonnes, indicating a deficit of 316 thousand tonnes. To mitigate this shortfall, the government is in the process of importing 200 thousand tonnes to ensure smooth supplies during the Kharif season. Similarly, DAP availability is expected to reach around 613 thousand tonnes, while demand is estimated at 900 thousand tonnes, emphasizing the need for timely imports and stable gas supplies to bolster national inventory.
These shifts in off-take, production, pricing, and international market dynamics underscore the importance of proactive measures by industry stakeholders to ensure stability and meet the agricultural demands of the nation.
