Pakistan's DAP inventories recorded their strongest month-on-month decline of the year with the start of the high application season. The country will likely end the year with satisfactory inventories, and fresh imports will be limited for the rest of the quarter.
Pakistan opened the October-March rabi season with 392,000t of DAP in stock and produced 75,000t last month, National Fertilizer Development Centre (NFDC) data show. Rabi opening inventories were well above the five-year average of 318,000t.
The country imported 117,000t last month, down from the 2020-24 October average of 146,000t because local distributors had held on to healthy DAP volumes. And DAP cfr prices peaked in the second half of August, meaning importers wanted to avoid getting caught out in a falling market.
Offtake seasonally leapt to the highest so far this year at 219,000t, in line with the five-year October normal.
The boost in demand pressured national inventories down to 361,000t, but this remains above the 2020-24 average end-October figure of 318,000t.
The high season typically extends into November before letting off in December. Using November opening stocks and NFDC production, imports and offtake estimates for November-December, stocks are expected to fall to 115,000t by the end of the calendar year.
November offtake could be underwhelming compared with NFDC estimates. Farmer finances have recovered from the start of the third quarter but remain fragile because of the absence of a much-anticipated November DAP subsidy to support wheat offtake, the country's main crop. And farmers are uncertain if their wheat sales will be supported by the government when harvesting kicks in from April next year, meaning they will commit less to sourcing DAP.
Importers are well covered for the rest of the year, and fresh commitments for DAP vessels will be limited to replenishing stocks in the first quarter during the off season. One 40,000t Moroccan DAP cargo is already scheduled for arrival in January, bought last week by producer and importer Fauji on formula.
