Pakistan's national DAP stocks grew throughout June to 324,000t, the sixth consecutive monthly stockbuild in the country, according to data from Pakistan government agency National Fertilizer Development Centre.
DAP cargoes lined up by importers ahead of global price increases earlier this year more than replaced early buying in the domestic market in anticipation of rising domestic costs.
The country started June with 236,000t of DAP in stock. It imported 128,000t and produced a typical quantity of 75,000t in the month, outweighing sales of 115,000t by 88,000t.
DAP offtake so far through Kharif, starting in April, now totals 308,000t. This remains below the 367,000t average for the same period over the three years up to the devastating floods that hit Pakistan in mid-June 2022. But it is 20pc above April-June offtake in 2024.
Global DAP prices have escalated in recent months, pushing Pakistani import prices up by nearly $150/t from a midpoint of $652.50/t cfr at the beginning of April. This, coupled with higher raw material prices boosting production costs, has forced domestic DAP prices up to as high as 13,000 rupees/50kg bag ex-Karachi.
The firm price trend spurred early domestic buying, but with farmer economics still poor thanks to low crop prices, distributors expect to see a downwards correction in domestic DAP offtake volumes throughout the remainder of Kharif and into Rabi, which starts in October.
Cumulative DAP imports throughout Kharif comes to 219,000t, a significant rebound from the 113,000t average for April-June imports over the previous three years.
But importers are now showing little interest in adding to the DAP line-up. Latest sales for Chinese DAP are reported in the $790s/t cfr, equivalent to a landed cost in the range Rs14,130-14,320/bag ex-Karachi at current exchange rates. This is well above current domestic prices, which are already leading to demand destruction among farmers.
