Fertilizer sales rise 5% in May, but Urea falls 31%, DAP drops 21%

Fertilizer sales in Pakistan saw a slight increase in May 2025, with Urea offtakes reaching approximately 418,000 MT, marking a 5% year-on-year rise. However, despite the increase in May, total Urea sales for the first five months of 2025 (5MCY25) stand at around 1.8 million MT, reflecting a 31% decline compared to the 2.6 million MT recorded in the same period last year, according to Intermarket Securities Limited.

DAP (Di-ammonium phosphate) offtakes in May 2025 saw a significant rise to about 95,000 MT, up from 41,000 MT in May 2024. However, DAP sales for the 5MCY25 period total approximately 340,000 MT, marking a 21% decrease compared to 432,000 MT in the same period of 2024.

The increase in fertilizer sales during May 2025 is believed to be driven by preemptive purchasing, in anticipation of a potential rise in federal excise duties (FED) under the Finance Bill FY26. However, the government has decided to keep the existing duty structure for the fertilizer sector, which has provided some relief.

Fauji Fertilizer Company (FFC) reported a decline in Urea offtakes, reaching approximately 207,000 MT in May 2025, down 28% from last year. FFC’s total Urea sales for the first five months of 2025 stand at about 853,000 MT, reflecting a 36% decrease compared to the same period in 2024. 

In contrast, FFC’s DAP sales for May 2025 reached 69,000 MT, more than double the previous year’s sales. However, total DAP sales for 5MCY25 decreased by 30% to 211,000 MT. FFC holds a 50% market share for Urea and 72% for DAP in May 2025.

Engro Fertilizers (EFERT) recorded a sharp increase in Urea offtakes for May 2025, reaching 142,000 MT, up 86% compared to last year. This growth is mainly attributed to the low base effect caused by the Enven plant’s major turnaround last year. However, EFERT’s Urea sales for the first five months of 2025 stand at 483,000 MT, down 38% from the same period last year. 

Engro’s DAP sales for May 2025 were recorded at 14,000 MT, a significant rise from 2,000 MT in May 2024. EFERT’s market share for Urea and DAP stood at 34% and 15%, respectively.

The fertilizer industry has seen a substantial increase in inventory, with Urea stocks reaching 1.3 million MT in May 2025, the highest level in the past eight years. FFC and EFERT together contribute 27% and 43% of the total inventory, respectively.

Although the fertilizer sector experienced a slight uptick in May 2025, experts believe this increase may be temporary due to ongoing challenges in farm economics. The growing Urea inventory could lead the government to consider allowing exports, which could present an opportunity for EFERT. Historically, export decisions have been made after reviewing the situation over a complete agricultural cycle, including the Kharif and Rabi seasons.