Engro Fertilizers slashes DAP rates by PKR 310/bag – Alfalah Securities Limited

Karachi: Engro Fertilizers Limited have reduced the price of Di-Ammonium Phosphate (DAP) yesterday by PKR 310 per 50-kg bag (7.64%) from PKR 4,060 per bag to PKR 3,750, on account of a reduction in the international DAP prices, which had reached to USD 545 per MT fob (US Gulf) in January 2012.

According to Alfalah Securities Limited, a reduction in DAP prices would not affect Engro Fertilizer’s DAP margins since it imports DAP from international producers and sells it in the local market. However keeping in view the local fertilizer market where prices of DAP are set accordingly to its import price, Alfalah Securities Limited believes a reduction in DAP price would shrink the margins of Fauji Fertilizer Bin Qasim Limited (FFBL) as the company would not be able to pass on the impact of the Gas Infrastructure Development Cess (GIDC) according to which gas prices were raised.

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