Pakistan: Vitality of the Fertilizer Industry

While they are groom perspectives on phosphate fertilizer prices for this summer, the Pakistani case shows the vitality of the fertilizer industry.

In Pakistan, farming accounts for one-fourth of gross domestic product and employs 43 percent of the workforce. Being a world top fertilizer consumer, they account for some five percent of the global intake.

Pakistan is dependent of fertilizer imports and has problems like its oligopolistic nature, with a market dominated by four major players: Engro, FFC, FFBL and Dawood Hercules. FFC and FFBL have together a share of nearly half of the urea and the phosphate market. Nevertheless, the fertilizer industry has remained the best performer at the capital market during the last decade.

The Karachi Stock Exchange’s (KSE) data show that during the last decade the fertilizer industry showed an enormous growth and remained the first with 45.58 per cent return on equity, leaving far behind the banks, which payed 18.66 per cent return, while the cement sector returned back to shareholders the profit of just 7.78 percent in the same period.

It has been reported that profits of all big players in the fertilizer industry almost doubled during the last calendar year and the main factor behind this increase in earnings has been the frequent increase in the prices of fertilizers.

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