Fertiliser stocks gain as cabinet approves new procurement policy

Fertiliser stocks Friday gained as much as 12 per cent after the cabinet approved a Rs 15,053 crore new procurement policy to ensure remunerative prices to farmers.

Ahead of the 2019 polls, the government Wednesday announced a Rs 15,053-crore procurement policy allowing states to choose a compensation scheme and rope in private agencies for procurement to ensure remunerative prices to farmers.

Reacting to the development, Fertilizers & Chemicals Travancore and Rashtriya Chemicals & Fertilizers made handsome gains of 11.96 per cent and 9.15 per cent, respectively, on the BSE.

Shares of National Fertilizer surged 4.81 per cent and Rama Phosphates settled over 3.25 per cent higher.

Coromandel International gained 2.41 per cent while Chambal Fertilisers & Chemicals and Basant Agro Tech India jumped 2.17 per cent and 1.71 per cent, respectively.

Mangalore Chemicals & Fertilizers also rose marginally by 0.66 per cent.

The new umbrella policy 'Pradhan Mantri Annadata Aay Sanrakshan Abhiyan' (PM-AASHA) was approved in the cabinet meeting, headed by Prime Minister Narendra Modi.

In the budget this year, 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 Agriculture Ministry and states.

Under the PM-AASHA, states would be allowed to choose from three schemes -- existing Price Support Scheme (PSS), newly designed Price Deficiency Payment Scheme (PDPS) and Pilot of Private Procurement Stockist Scheme (PPSS) -- to undertake procurement when prices of commodities fall below the MSP level.