Pakistan Fertilizer: Subsidy Withdrawn: To Pass on or Not to Pass? – By Elixir Research

<ul><li><span style="font-family:Arial, Helvetica, sans-serif;font-size:medium;">GoP has decided to withdraw cash subsidy on Urea/Phosphate based fertilizer which were announced in FY17 budget (Urea: PKR156/bag and DAP: PKR300/bag).</span></li><li><span style="font-family:Arial, Helvetica, sans-serif;font-size:medium;">We opine that manufactures would be more comfortable in passing on the urea subsidy removal on account of strong rebound in international urea prices to USD260/ton.</span></li><li><span style="font-family:Arial, Helvetica, sans-serif;font-size:medium;">DAP prices are also likely to be increased, however international pricing scenario doesn't support domestic price hike</span></li><li><span style="font-family:Arial, Helvetica, sans-serif;font-size:medium;">Going forward, we believe that subsidy pass on impact could fur...