Fertilizer stocks zoom after govt approves new crop procurement policy

Shares of fertlizer companies rallied up to 18 per cent in intra-day deals on Friday after the govenment approved a new procurement policy on MSP (minimum support prices). Under the policy, one scheme will focus on compensating oilseeds farmers if rates fall below the MSP, and another will allow states to rope in private players for procurement, PTI reported Wednesday citing sources. READ MORE HERE

In Budget 2018, the government had announced that it will put in place a fool-proof mechanism to ensure minimum support price (MSP) to farmers. It had asked think-tank Niti Aayog to suggest a mechanism in consultation with the union agriculture ministry and states.

According to the sources, the agriculture ministry’s proposal on new procurement policy ‘Annadata Maulya Samrakshana Yojana’ was taken up for discussion in the cabinet, and the same has been approved, the report added. 

Among stocks, Rashtriya Chemicals & Fertilizers (RCF) surged as much as 18 per cent to hit a high of Rs 79.85 apiece on the BSE in intra-day trade. Fertilizers & Chemicals Tranvancore (FACT) stock was trading nearly 10 per cent higher at Rs 46.80 apiece on BSE. That apart, shares of National Fertilizers were trading 7 per cent higher at Rs 47.75, while those of Madras Fertilizers were trading at Rs 26.40 apiece, up 4.14 per cent.

In its annual report 2017-18, the Reserve Bank of India (RBI) had said, “MSP has a positive and statistically significant effect on retail prices of all crops, although it varies significantly across crops. In general, it has a stronger effect for those crops where procurement is substantial, such as paddy and wheat.”

COMPANY	LATEST	PREV CLOSE	GAIN(

) GAIN(%) VOLUME R C F 74.85 67.75 7.10 10.48 997723 COROMANDEL INTER 405.95 396.80 9.15 2.31 1132 CHAMBAL FERT. 161.95 158.65 3.30 2.08 32371 G S F C 112.80 110.65 2.15 1.94 77738 G N F C 401.75 395.35 6.40 1.62 32272

(Stock price as at 11 am. )