Engro Chemical Pakistan Limited 1Q‐2009 Business Results
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Security Analysts’ Briefing • April 29th, 2009
Urea Market Environment
Market demand for Urea stood at 1.5 million tons for the first quarter of 2009 , up from 1.4 million tons in the same period last year. Increase is attributable to: ‐ Wheat support price increased from Rs.625/40Kg in 1Q 2008 to Rs.950/40Kg which resulted in increase of 6% increase in area under wheat cultivation.
Domestic production at 1.15 million tons was slightly lower as compared to the first quarter of 2008. Increased demand for urea was primarily met through higher imports vs. last year (373kt vs 125kt)
1Q‐2009 Business Results Security Analyst Briefing
Urea Market Environment, continued…
International urea prices saw an upward adjustment through the first quarter after witnessing a sharp decline in the last quarter of 2008. The average equivalent landed price of imported urea was approximately Rs. 1,210 ($ 281/ton) against the prevailing average domestic price of Rs. 670 per bag. Spot landed price of imported urea is approximately Rs 1,230 per bag. Even at the reduced international urea prices, the domestic fertilizer industry continues to make significant contribution to the agricultural sector, by keeping domestic prices below international levels.
1Q‐2009 Business Results Security Analyst Briefing
Urea Industry Supply and Demand
Volume kT Opening Inventory Production Imports Sales Closing Inventory (Net)
1Q‐2009 62 1,148* 373 1,540 38
1Q‐2008 148 1,203 126 1,403 71
*
Lower FFBL production due to annual turnaround
1Q‐2009 Business Results Security Analyst Briefing
Phosphates Market Environment
Government subsidy on phosphates was discontinued in 2009 due to lower international prices. Industry wide sales volume of phosphatic fertilizers increased from 0.1 million tons to 0.2 million tons vs. the same period last year....