Urea consumption in Pakistan fell to 483,000t in June, down by 21pc on a year earlier, with the country's National Fertilizer Development Centre (NFDC) attributing the drop to lower wheat prices and delayed sowing in the summer months.
June output fell to 483,000t from 610,000t in the month last year and 737,000t in June 2022. Urea consumption in April-June was down by 18pc at 1.21mn t.
The NFDC attributed the fall to lower wheat prices and the delayed sowing of crops in the summer Kharif season, which runs from April-September. But the NFDC did note that urea offtake may pick up in the rest of the season.
The dire situation facing farmers has prompted Pakistan's government to impose an indefinite ban on wheat imports into the country, as of 12 July, in a bid to stabilise domestic wheat prices. This may subsequently encourage local urea purchases.
The lacklustre consumption so far this Kharif season has eased pressure on urea supplies, with countrywide stocks unexpectedly climbing slightly through one of the peak-demand months of the summer season, up by 6,000t to 231,000t.
Domestic production of 497,000t also added some support to inventories last month, but this was down from 548,000t in June last year.
Pakistan's state-owned importer TCP has issued a tender to buy 150,000t of urea, closing on 29 July, which will add further support in August-September when cargoes are set to arrive.
But the country is still facing a potential tightness of urea supply in July-August, should consumption levels pick-up soon and the import cargoes ship from origins with a long sailing time.
The NFDC is projecting consumption of 750,000t and 615,000t in July and August, respectively, which may leave stocks as low as 29,000t by August, without factoring in imports. The cargoes must arrive in Pakistan by 25 September, TCP's tender document stipulated.
