DAP off-take rises 262pc

Wednesday, September 02, 2009

KARACHI - The fertiliser sector continues to enlist decent growth as overall nutrients off-take registered a growth of 67 percent in July 2009 on Year on Year (YoY) basis, stated figures released by the National Fertiliser Development Centre (NDFC) for 7MCY09. The total nutrient off-take continued to follow a rising trend as huge growth of 67 percent was registered in July 09 on YoY basis. Moreover, encouraging growth of 21 percent was observed on MoM basis as demand continued to persist despite better off-take during June 09. The impressive growth in the overall off-take was primarily backed by robust increase in the demand of DAP which in turn was reflected in better phosphate growth and thereby a much improved NP ratio of 3.00. Though the ratio is still higher at 4.61:1 on YTD basis, it has anyhow improved from 11.6:1 which prevailed during the same period last year. However, DAP sales remained attractive as total off-take grew by 585 percent on YoY basis and 262 percent on CYTD basis, while this massive upsurge can be attributed to last year s much lower DAP demand due to higher prices which prevailed back then, MoM off-take, on the other hand, also showed quite decent growth as an increase of 58 percent was registered. Better DAP off-take along with timely rainfall is expected to have a positive impact on the yields of sugarcane, rice and cotton as Kharif growing season peaks. As far as urea is concerned, there has been an increase of 12 percent in CYTD off-take, which also improved by 13.8 percent and 26.4 percent on MoM and YoY basis respectively.

All in all, a much better Urea-to-DAP ratio of 2.73 was maintained during July 09 compared to last 7 year s average of 4.11 for the same month though the ratio still stood disturbed at 5.05 on CYTD off-take. While DAP prices have come down significantly from last year s Rs3,079/bag to Rs1, 897/bag in Jul 09, the trend appears to repeal in Aug 09 amidst global price increase (7pc during Aug 09). Moreover, MoM DAP off-take is expected to slowdown in Aug09 amidst rising price trends coupled with seasonal tendency of lower off-take. Urea prices on the other hand, continued to remain higher on YTD avg., improving by 20 percent. Month-wise urea prices however continue to topple down marginally, decreasing by 0.6 percent MoM and further by 3.8 percent in Aug 09.

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