Pakistan’s Fertilizer Sales Decline as Rabi Sowing Ends

Pakistan’s urea offtake took a significant hit in January as the Rabi sowing season drew to a close, according to data from the National Fertilizer Development Center (NFDC). Urea sales stood at approximately 446,000 metric tons (MT), marking a 27% yearly decline and a steep 55% monthly drop. Industry-wide DAP offtake also slumped 8% on an annual basis and 55% on a monthly basis to 61,000 MT.

The slowdown follows an unusually high offtake in December when urea sales surged to 991,000 MT compared to 627,000 MT in the same period last year. This spike was driven by anticipatory purchases ahead of expected price adjustments. Despite the January dip, cumulative urea offtake for the ongoing Rabi season (October 2024 – January 2025) rose 6% YoY to approximately 2.5 million MT, indicating better acreage of wheat cultivation.

Company Performance and Market Trends

Fauji Fertilizer Company (FFC), the country’s leading urea producer, recorded an offtake of approximately 194,000 MT in January, reflecting a 27% decline compared to last year. However, cumulative sales for the Rabi season rose 10% to 1 million MT, up from 900,000 MT in the same period the previous year. FFC’s urea market share improved by six percentage points to 44% in January.

Meanwhile, diammonium phosphate (DAP) offtake increased 31% YoY to 37,000 MT, though FFC’s DAP market share dropped by six percentage points to 60%. Engro Fertilizers Limited (EFERT) saw an even sharper decline in urea sales, which plummeted 74% compared to December and 49% compared to last year to around 107,000 MT.

The drastic drop followed a December sales surge when EFERT sold 412,000 MT – nearly double its 211,000 MT offtake in December 2023 – amid expectations of price discount removal from January. EFERT’s urea market share dropped to 24% in January, down from 42% in December. Its DAP offtake stood at approximately 13,000 MT, with a 21% market share.

Fatima Fertilizer (FATIMA) emerged as an outlier, posting a more than twofold yearly increase in urea sales to 108,000 MT, mainly due to better gas availability. This resulted in FATIMA's market share jumping to 24% in January, up from 8% in the same period last year.

Inventory and Imports

Urea's closing inventory for January stood at 440,000 MT, the highest recorded month in the past eight years. FFC accounted for 16% of this inventory, while EFERT held the largest share at 45%.

DAP inventory stood at roughly 146,000 MT, with FFC and EFERT accounting for 25% and 41%, respectively. Additionally, DAP imports resumed in January, with 65,000 MT arriving in the country, of which EFERT accounted for the bulk of 55,000 MT.

Outlook: Stable Demand Expected Amid Policy Support

Despite the January slowdown, cumulative urea and DAP offtakes for the Rabi season rose 6% and 17% YoY, respectively. The fertilizer sector remains well-positioned, supported by government efforts to ensure food security and favorable pricing for staple and cash crops such as wheat, maize, rice, and sugarcane. Industry experts anticipate the sector will adjust to gas price hikes and inflationary pressures, keeping profitability intact.