Fertiliser stocks in demand

Six fertiliser companies rose by 0.42% to 2.72% at 10:30 IST on BSE on reports Reliance Industries has agreed to continue supplying natural gas from its KG-D6 fields at the prevailing rate of $4.2 per unit to fertiliser companies.

Rashtriya Chemicals and Fertilisers (up 2.72%), National Fertilizers (up 2.07%), Zuari Global (up 1.58%), Chambal Fertilisers & Chemicals (up 1.38%), Coromandel International (up 0.74%) and Deepak Fertilisers & Petrochemicals Corporation (up 0.42%), edged higher.

Shares of Reliance Industries (RIL) were up 0.62% at Rs 935.30. It hit a 52-week high of Rs 944.35 in early trade today.

The S&P BSE Sensex was up 15.50 points, or 0.07% at 22,401.77.

According to reports, RIL and fertiliser companies on Monday, 31 March 2014, failed to agree on the key terms of sale of natural gas from Tuesday, 1 April 2014, but the government asked RIL to continue supplies on existing terms in the interim.

Fertiliser Secretary Shaktikanta Das told the media on Monday, 31 March 2014, that RIL has agreed to continue supplying natural gas from its KG-D6 fields at the prevailing rate of $4.2 per unit to fertiliser companies until the Fertilizer Association of India (FAI) and RIL reach a new agreement.

The existing sales agreements and the government-approved gas price were valid up to 31 March 2014. The new pricing formula, which the Cabinet had cleared for sales from 1 April 2014, has been deferred by the Election Commission, creating uncertainty about agreements between RIL and its customers.

RIL and FAI have agreed to sit together and finalise the contract very expeditiously, Das told the media after a four-hour meeting with officials of fertiliser and oil ministries, executives of RIL and members of FAI on Monday.

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