Fertiliser stocks rally as cabinet approves new procurement policy

Fertiliser stocks Friday were trading with handsome gains in morning trade on the bourses after the cabinet approved 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, shares of fertiliser stocks rallied in morning trade and among them, Rashtriya Chemicals & Fertilizers and Fertilizers & Chemicals Travancore were the top gainers as they jumped 17.85 per cent and 18.87 per cent, respectively, on BSE.

Besides, shares of National Fertilizer jumped 10.62 per cent to touch its intra-day high of Rs 49.45, Rama Phosphates (surged 7.74 per cent), Basant Agro Tech India (up 3.76 per cent), Mangalore Chemicals & Fertilizers (up 3.59 per cent), Chambal Fertilisers & Chemicals (up 4.09 per cent), Coromandel International (up 2.62 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 union 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, he said.