Urea’s Inventory Reaches 8-Year High

Pakistan’s urea stocks reached an eight-year high in April 2025, primarily driven by a significant decline in fertilizer offtake across the country. Data released by the National Fertilizer Development Centre (NFDC) indicates that the closing balance of urea increased to 1.104 million tonnes by the end of April.

Urea offtake in April 2025 increased by over 3 times compared to April 2024, settling at 319,200 tonnes. The overall nutrient intake for April 2025 also decreased by 8.8% year-on-year. This downward trend is not isolated to April; cumulative urea offtake for the first four months of 2025 stood at 1.35 million tonnes, a 37% drop compared to 2.1 million tonnes in the same period last year.

A major contributing factor to the reduced demand for fertilizers is the prevailing weak farm economics and ongoing water shortages. Farmers are facing increased production costs and shrinking incomes, which directly impact their purchasing power for essential inputs like urea.
The substantial carryover stock from previous months further exacerbated the inventory situation. With 820,000 tonnes of urea remaining from March, the fresh production added to an already high supply.

While global urea prices have seen fluctuations, domestic urea prices in Pakistan softened slightly in April, averaging around PKR 4,499 per 50 kg bag, a minor decrease of 0.5% month-on-month. This slight softening was insufficient to stimulate demand significantly.

The fertilizer industry has expressed concerns over proposed tax hikes on fertilizers in the upcoming FY26 budget. Industry representatives warn that higher taxation would further reduce farmers’ purchasing power.
The current situation underscores the urgent need for comprehensive policies to support farmers and ensure a sustainable and competitive agriculture sector in Pak
istan.