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Fertilizer manufacturers have raised urea prices by Rs190 per bag, bringing the retail price to roughly Rs2,440, in anticipation of an increase in gas prices prior to the restart of the IMF program.
Fertilizer prices have been on the rise due to a combination of factors including inflation, rupee depreciation and a recent IMF demand that gas prices be increased, Waqas Ghani Kukaswadia, an analyst at JS Global, was quoted as saying in Express Tribune.
“The sector’s production cost has also been impacted by these developments, leading to concerns about further price increases in the future,” he added.
In the last quarter of calendar year 2022, urea sales were expected to touch 1.8 million tons, a 9% year-on-year increase.
Moreover, cumulative urea sales for 2022 were expected to reach 6.61 million tons, an increase of 4% from last year. Closing inventory for 2022 was expected to be around 65,000 tons.
While larger local players witnessed slower growth, smaller players and imported urea sales were expected to perform well. Factors contributing to this included the temporary shutdown of base plants for maintenance as well as plant disruptions at Fauji Fertilizer Company (FFC) and Engro Fertilizers Limited (EFERT).
Alongside urea, the demand for di-ammonium phosphate (DAP) is also on the rise. DAP offtake for December 2022 was expected to reach 160,000 tons, an increase of 37% compared to last year.
