Pakistan’s producers propose urea at competitive prices
Pakistan’s leading urea manufacturer, Engro Fertilizers Limited believes that on the agriculture front domestically, following the momentum built over previous years, farm economics continued to improve. Fueled by higher agricultural yield prices and enhanced commodity support prices, demand for urea and other fertilizers has been maintained.
The first half of the 2023 report (January – June) of Engro Fertilizers says that in terms of global pricing, urea experienced a significant drop in 1H 2023, reaching USD 260 per ton (landed equivalent to PKR 3,706 per bag) by the end of June, compared to USD 436 per ton (equal to PKR 4,898 per bag) at the beginning of the year.
The fertilizer industry has ensured that local farmers continue to benefit from low prices of domestically produced urea. As of June 30, 2023, Engro urea prices stood at PKR 2,994 per bag, offering a discount of approximately 41% compared to international prices.
Urea demand in Pakistan declined by 4.5% and stood at 3.098 million metric tonnes against 3.244 million in 1H 2022. The industry demand was wholly met through domestic production without any need for imports during 1H 2023. However, the urea market saw significant price fluctuations due to fertilizer manufacturers’ varying gas pricing regimes.
Engro Fertilizers is a strong proponent of urea price stability and is supporting the efforts by the industry and government on gas price unification. DAP international prices continued their downward momentum due to high stocks in consuming countries and declining crop prices globally. They stood at USD 480/ton by the end of 1H 2023 compared to USD 730/ton at the start of the year. However, due to rapid rupee devaluation, the cost of imports has not decreased with the same trend.
Engro Fertilizers (EFERT) is a public company incorporated in Pakistan on June 29, 2009, as a wholly owned subsidiary of Engro Corporation Limited (the Holding Company), which is a subsidiary of Dawood Hercules Corporation Limited (the Ultimate Parent Company). The Company is listed on the Pakistan Stock Exchange Limited (PSX).