RCF, Chambal, National Fertilizer rally on hike in urea prices

NEW DELHI: Fertilizer stocks such as Rashtriya Chemicals and Fertilizers ( RCF), Deepak Fertilizers, Chambal Fertilizers and National Fertilizers rallied over 5 per cent each on Thursday on reports that the government has raised urea prices by Rs 50/tonne.

At 01:00 pm, RCF was trading 5.5 per cent higher at Rs 59.60 on the back of two-fold surge in trading volumes. Deepak Fertilizers was up 5.3 per cent at Rs 140, followed by Chambal Fertilizers and National Fertilizer which were up nearly 6 per cent each.

Current price of urea is Rs 5310 per tonne, which means 1 per cent hike. Industry was, however, hoping for a 10 per cent hike in prices. According to analysts, the hike is at retail level and not at the company level and hence will not have any impact on the companies.

“The stocks are running up because of the government’s proactive stance on the reforms,” analysts said.

The Cabinet also cleared direct transfer of fertliser subsidy in 10 districts (pilot projects), although it might not impact. According to industry experts, it will only ease pressure on working capital of companies, if it gets implemented pan India.