Pakistan urea sales rise 0.9% from a year earlier in third quarter

Pakistan’s urea sales rose 0.9% from a year earlier in the third quarter of calendar 2026, recovering from monsoon-related and logistical disruptions that had delayed fertilizer application, according to National Fertilizer Development Centre data.

Urea offtakes reached 1.871 million tons in the July-September quarter, up 26.9% from the previous quarter, the data showed.

On a cumulative basis, urea sales rose 4% from a year earlier to 4.383 million tons during the first nine months of 2026, led by Fauji Fertilizer Company, whose sales increased 10% to 2.159 million tons.

Fatima Fertilizer recorded an 8% increase in sales to 769,000 tons, while Engro Fertilizers’ sales declined 4% to 1.23 million tons during the period.

The modest annual growth in third-quarter urea sales was primarily driven by a sharp increase in September offtakes, as fertilizer demand in earlier months was affected by monsoon disruptions, transporter strikes and other logistical problems, analysts said.

Improved farm economics also supported the recovery in fertilizer demand.

DAP sales, however, remained weak. Sales stood at 287,000 tons in the third quarter, down 15.6% from a year earlier but up 48.1% from the previous quarter.

For the first nine months of 2026, DAP offtakes declined 3% from a year earlier to 773,000 tons, reflecting subdued demand and a continued shift away from DAP.

Elevated international DAP prices have encouraged farmers to favor relatively cheaper nitrogen-based fertilizers, analysts said.

What is expected from Engro Fertilizers?

Engro Fertilizers is expected to report earnings of about PKR 9.278 billion, or PKR 6.95 per share, for the third quarter, representing a 60% increase from a year earlier, according to the preview. The company is also expected to announce a dividend of about PKR 6.60 per share, equivalent to a 95% payout ratio.

Net sales are projected to rise 44% from a year earlier and 138% from the previous quarter, mainly due to a sharp recovery in urea offtake. Urea volumes are estimated to have increased 17.6% from a year earlier and 168.1% from the previous quarter.

Engro’s urea sales are estimated at 693,000 tons for the quarter, supported by higher inventory availability and improved farm economics.

The company also benefited from supply disruptions at other producers. Plant shutdowns at Fatima Fertilizer, Fauji Fertilizer and Agritech Limited amid geopolitical tensions supported Engro’s sales during the quarter.

As a result, Engro’s urea market share rose to 37% in the third quarter from 17.5% in the previous quarter and 31.8% in the same quarter a year earlier.

DAP offtake at Engro also increased 168.4% from a year earlier to 37,000 tons.

Engro reduced its urea discount to PKR 150 per bag from PKR 400 in January and withdrew the discount completely in April. The company’s last urea price increase was also implemented in April.

What is expected from Fauji Fertilizer?

Fauji Fertilizer is expected to report third-quarter earnings of about PKR 20.549 billion, or PKR 14.28 per share, up about 6% from a year earlier, according to the preview. The company is also expected to announce a dividend of about PKR 10.75 per share for the quarter, representing a 75% payout ratio.

The company’s blended gross margin is estimated at 31%, reflecting strong core profitability. Higher other income and a lower effective tax rate are also expected to support earnings.

Fauji Fertilizer’s prilled and granular urea volumes declined 8.9% and 11.9%, respectively, during the quarter, while Sona DAP volumes fell 24.2% from a year earlier.

The company’s urea market share declined to 40% in the third quarter from 54% in the previous quarter and 45% in the same quarter a year earlier, primarily because of Engro’s sharp increase in offtakes.

Fauji Fertilizer, like Engro, last raised urea prices in April.

DAP-phosphoric acid margins narrowed to USD 125 per ton from USD 238 per ton in the previous quarter, weighing on overall gross margins, although margins remained relatively high.

The decline was mainly caused by a 29% increase in phosphoric acid prices from the previous quarter, which exceeded the 7% increase in DAP prices.

Other income during the quarter is expected to include dividends equivalent to PKR 2 per share from Askari Bank and PKR 1.50 per share from Fauji Cement Company, in addition to investment income.