Thursday, February 18, 2010

Fertilizers back in business, Government raises Urea prices:
  • The government has approved a 10-percent increase in urea prices and partially eased controls on other fertilisers. The hike was announced by Ambika Soni, information and broadcasting minister, after a cabinet meeting. The urea prices would rise by 483 rupees per tonne from April 1, the minister said. 
  • The annual fertiliser subsidy is estimated at around 700 billion rupees in the current financial year. 
  • Finance Minister Pranab Mukherjee, who will present the annual budget on Feb 26, is expected to lay down a roadmap for rationalising oil and fertiliser subsidies.
  • Currently, Indian companies sell fertilisers at a fixed price to farmers and prices are not based on manufacturing cost. 
  • The government compensates for the losses by way of subsidies. After the decision comes into effect, companies will sell urea at the higher — though still fixed — price, which translates into the need for fewer subsidies by the government. Prices of some fertilisers like P&K have been de-controlled, Soni said.
FERTILIZER stocks are looking very good with some positive announcements expected in budget and we have a buy on DEEPAK FERTLIZERS which still holds value.

No comments: