Fertiliser stocks rally ahead of policy meet

 New Delhi, Feb 3: 

Ahead of Committee of Secretaries' (CoS) meeting on urea pricing issue, major fertiliser stocks on Thursday rallied by upto 3.58 per cent on hope that the soil nutrient would also be freed from controls in line with phosphoric and potassic fertilisers.

"The Committee of Secretaries will meet on February 7 to look into the issue of introduction of nutrient-based subsidy (NBS) scheme on urea," a senior fertiliser ministry official told PTI.

In anticipation of the CoS meeting, fertiliser stocks moved up in sync with Sensex, which also zoomed 2.1 per cent to 18,462.09 points today.

Chambal Fertilisers and Chemicals, Deepak Fertilisers and Petrochemicals and GHCL gained by 3.58 per cent, 1.81 per cent and 1.23 per cent to close at Rs 73.85, Rs 160.40 and Rs 41.15 per share at the close of trading today.

A Group of Minister, headed by Finance Minister Mr Pranab Mukherjee, had last month refrained from taking any decision on urea by referring the issue to a CoS and asked it to submit a report in a month to it, which will then take a final call.

Secretaries from the planning commission, fertiliser, agriculture and finance ministries would attend the meeting.

The Government has already freed potassic and phosphoric fertilisers with the introduction of NBS (nutrient-based subsidy scheme) with effect from April last year. However, it kept price and movement of urea under control, which consists of nearly half of India's total fertiliser consumption.

The official said that besides urea price deregulation, the panel is also expected to discuss on removal of import and export restrictions to steer a total free market in urea.

The introduction of NBS into the urea sector is likely to bring in a lot of investment in the cash-starved sector.

During 2010-11, the country is expected to consume 26 million tonnes of urea, 11 million tonnes of of DAP, five million tonnes of MOP and 10 million tonnes of various complex fertilisers.