Engro Urea price up by Rs 100 per 50 kg

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Engro Urea price up by Rs 100 per 50 kg

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Engro Fertilizer announced to raise Urea prices by Rs 100 per 50 kg bag from tomorrow.

21 December,2011 04:41 pm

Engro Fertilizer has reversed its previous decision by raising urea prices by Rs100 (inclusive of sales tax) per 50 kg bag to Rs1580 per bag (dealer transfer price). Retail price for the farmer will now be close to Rs1600 a bag effective from tomorrow.This is primarily due to non availability of gas to Engro New plant (Enven) since last 13 days despite governments’ commitment to provide gas in the month of December to meet higher demand in peak Rabi season.We expect other fertilizer producers to also increase the price in next few days in line with past practice.If new prices remain the same for next year (2012), we believe FFC’s annualized earnings will increase by Rs2.8. Similarly earnings of FFBL and Fatima will increase by Rs0.55 per share and Rs0.35 per share.With regards to Engro, increase in urea price will improve our 2012 EPS by Rs3.5 assuming other things being constant.Going forward, we believe that the imposition of recent gas cess (likely to be effective from January 2012) continues to pose a risk to fertilizer earnings unless manufacturers’ raises urea prices in line with increase in feed stock prices.