Fertiliser Sector

vasa1 · #1 18th February 2010, 03:35 PM

I know Alchemist doesn't like these companies and this sector but there seems to be the possibility of a chance of change

Govt shifts to nutrient-based fertilizer sops, hikes urea prices
Published on Thu, Feb 18, 2010 at 15:38
Link

The speed at which change will come can be seen from the fact that this whole business of nutrient-based whatever is from the last budget.

Anyway, one stock I have a bit of, Coromandel International, made a break quite late in the day.

Hiking urea prices can lead to riots of all sorts, so now we have to wait for the "roll-back".

Alchemist · #2 18th February 2010, 09:16 PM

As of now,the change would affect farmers and government.

I don't think there is much in it for the fertilizer companies.

The higher prices would be nullified by lower subsidies.

Quote:

While there may not be an immediate impact for fertiliser companies as the government has got assurance from them that prices won’t be hiked in the current season

However, some feel that it's a signal that the government is willing to deregulate the fertilizer sector and thus, a long-term positive.

vasa1 · #3 22nd February 2010, 10:24 AM

Fertiliser consortium strikes deal to import potash at $370/t

Link

Quote:

the effective price ... would be $362-363 a tonne”, industry sources said.
...lower than the $460 a tonne price negotiated by Indian companies last June for material supplied through July 2009-March 2010.

Even prior to that, the jointly worked out price with international suppliers for the July 2008 to March 2009 period was $625 a tonne.

But another major fertiliser, DAP, is getting more costly.

Quote:

But matters could be tricky when it comes to phosphatic fertilisers, where – unlike in potash – international prices are showing an upward trend.

vasa1 · #4 22nd February 2010, 10:36 AM

Fertiliser sector: Right moves

The link has a nice chart of Fertiliser sector index (Business Standard) versus the Sensex over about the last one year.

It would interesting to see what weightage is taken up by PSU companies.

The BSE doesn't seem to have a Fertiliser sector index.

It is not listed here.

vasa1 · #5 27th February 2010, 07:13 AM

Quote:

But there is a catch. ... “Government will ensure that nutrient based fertiliser prices for transition year 2010-11 will remain around MRP's currently prevailing”.

In other words, fertiliser companies will not be able to price non-urea fertilisers as freely as they would like to. “If we cannot raise prices of so-called decontrolled fertilisers and, at the same time, the subsidy allocation on these nutrients are cut, how would we survive?” an industry source pointed out.

Cos won't be able to raise non-urea fertiliser prices