KARACHI - The total domestic off-take of Urea increased by 18 per cent while that of Di-Ammonia Phosphate (DAP) decreased by 64 per cent during nine months (January-September) of CY08 on year-on-year basis. As per the latest data released by the National Fertilizer Development Centre (NFDC), urea off-take increased by 18 per cent to 4.023 million tons in the period under review as compared to 3.404 million tons in the same period a year earlier while the DAP off-take declined by 64 per cent to 0.271 million tons against 0.760 million tons in the corresponding period of last year. Urea sales continued with their upward momentum owing to widening price differential between urea and DAP prices forced farmers to substitute urea with DAP and urea dealer inventory hoarding in first half of CY08 coupled with suspected smuggling across country's western borders. Sky-high DAP prices in addition to uncertainty regarding the subsidy/bag on DAP were the major factors contributing towards the 64 per cent on Year on Year basis (YoY) decline in DAP off-take. Weighted average prices of Sona urea and Sona DAP during the nine-month of CY08 stood at Rs662 per bag, up 23 per cent YoY and Rs2,792 per bag, jumped 153 per cent YoY respectively. DAP sales in Septemeber witnessed a revival, rising by an encouraging 196 per cent on month-on-month basis (MoM) to 72,000 tons. However, on a YoY basis, DAP sales in Sep-08 were down by 3 per cent, which were still 21 per cent lower than the 5-year average. Sona DAP prices in Sep-08 remained unchanged at Rs3,100 per bag, up 0.36 per cent MoM . Sep-08 was a healthy month for fertilizer off-take as the anticipation of higher wheat support prices, announcement of Rs2,200 per bag subsidy on DAP fertilizers and the commencement of Rabi season in Sindh (late Sep) spurred sales. Urea sales in September -08 depicted a growth of 75 per cent as they increased to 0.42 million tons as compared to 0.239 million tons in the same period of last year. However, on a MoM basis, urea remained stagnant, declining by a meagre 0.22 per cent MoM. Retail prices of Sona urea stood at Rs785 per bag, which is a 3 per cent increase MoM. On Company wise market shares in nine-month of CY08, the YTD urea market shares for Fauji Fertilizer Company (FFC), ENGRO, and Fauji Fertilizer Bin Qasim Limited (FFBL) stood at 46 per cent, declined by 444bps, 20 per cent, dipped by 87bps and 13 per cent, increased by 450bps on Year on Year basis respectively. DAP YTD market shares for FFC, ENGRO, and FFBL were recorded at 15 per cent, raised by 6.47pps, 17 per cent plunged by 11.94pps, and 21per cent, fell by 11.64pps on Year on Year basis respectively. In September, FFBL opened its account for second half of CY08 DAP sales, selling o.21 million tons of DAP. ENGRO's urea sales declined by 12 per cent on month on month basis to 0.70 million tons, owing to reduced urea production of 17 per cent MoM to 0.70 million tons, which is being expected that due to some maintenance/technical issues. The industry's estimated ending urea inventory stands at very low levels of 62,000 tons, declined by 83 YoY, further highlighting the need for increased urea imports. On the other hand, DAP ending inventory stands at comfortable levels of 647,000 tons, increased by 73 per cent YoY. The arrival of the Rabi season (Oct-March), in conjunction with higher wheat support prices and DAP subsidy on per bag is expected to spur the demand for DAP fertilizers, as the Rabi season historically accounts for approximately 62 per cent of annual DAP off-take.