Fertilizer dealers have stockpiled additional inventory in anticipation.
Sales and profits of Fauji Fertilizer Company and Engro Fertilizers have increased, while Fatima Fertilizer has witnessed a decline in both sales and profitability.
Karachi: Following the US and Israeli strikes on Iran, escalating tensions in the Middle East and the closure of the Strait of Hormuz have significantly disrupted not only fuel supplies but also the transportation of chemical fertilizers. This situation has heightened expectations that fertilizer prices could rise sharply.
In response to these expectations, fertilizer dealers have engaged in aggressive pre-buying and stockpiling of locally produced fertilizers. This hoarding has contributed to a notable increase in profits for fertilizer companies.
According to a research report issued by AKD Securities, fertilizer dealers made advance purchases during the first quarter of 2026. As a result, the sector’s profitability rose by 9% year-on-year to PKR 59.4 billion. Profitability improved for FFC and Engro Fertilizers, whereas Fatima Fertilizer recorded a decline. Excluding Fatima’s losses, the sector posted a significant 29% increase in profits.
Urea remained the dominant component in fertilizer sales. During the first quarter, FFC’s urea sales increased by 12% to 602,000 tons, while Engro Fertilizers’ urea sales rose by 7% to 279,000 tons. In contrast, Fatima Fertilizer’s urea sales dropped sharply by 59% to 87,000 tons.
Similarly, DAP sales showed strong growth. FFC more than doubled its DAP sales compared to the same period last year, reaching 182,000 tons. Engro Fertilizers’ DAP sales increased by 64% to 40,000 tons. Fatima Fertilizer’s NP fertilizer sales rose by 30% to 169,000 tons, while its CAN sales declined by 30% to 126,000 tons.
Due to panic buying by dealers, the fertilizer sector’s total sales increased by 23% to PKR 179.9 billion, compared to over PKR 145 billion in the same period last year. However, rising fuel prices led to higher distribution costs, pushing operating expenses up by 7% to over PKR 14 billion.
