Engro Fertilizers is likely to face cost pressure as the Middle East conflict lifts international DAP prices and raises freight and insurance costs on imported product. Companies that rely on imported phosphate are more exposed than those with local DAP capacity.
That squeeze sits against a mixed August. Total fertilizer offtake rose about 23 percent month-on-month to 962,111 tons as irrigation picked up for Kharif crops, especially urea, NP and CAN, as per Ta.
Offtake Recovers, Yearly Demand Still Soft
Rainfall has stayed below seasonal projections. Crop production and cultivation are likely to remain under strain, which could trim later demand for both urea and DAP.
On a yearly basis, total offtake was down about 16 percent. Nutrient offtake fell 15 percent to 450,000 tons, with nitrogen, phosphate and potash all lower.
Urea Sales Rise as Inventories Stay High
Urea offtake climbed 21 percent month-on-month to 701,000 tons. Dealers also caught up on delayed applications after rains in the north. Sales were still 14 percent lower than a year earlier.
Engro sold 326,000 tons of urea, up 96 percent from July and 17 percent year-on-year. Fauji Fertilizer sold 226,000 tons, down 16 percent month-on-month and 30 percent from last August. Fatima’s offtake was 128,000 tons.
Urea stocks stood at 709,000 tons at the end of August. Inventories have built since the start of the year after discounts were pulled back. High stocks raise the risk of fresh discounting and weaker margins later this year.
Dap Holds Seasonally as Import Costs Climb
DAP offtake rose 31 percent month-on-month to 126,000 tons on seasonal farm use, but fell 8 percent year-on-year. Engro’s DAP sales rose to 16,000 tons. Fauji sold 91,000 tons.
Local Sona urea was priced at Rs4,679 per 50-kg bag, up 1 percent. DAP rose 3 percent to Rs16,480. Chinese DAP was quoted around $880–900 a ton.
Farm Support May Help, Fourth Quarter Looks Tighter
Urea demand is expected to stay near 6.6–6.7 million tons this year. Domestic prices remain well below international levels because most plants use indigenous gas.
DAP looks more vulnerable to higher landed costs. Fauji, which produces DAP locally, has a clearer cost edge. Budget measures such as the Zarkhezi programme and an agri storage financing facility may support farm economics later. The wheat support price remains Rs3,500 a maund.