Fertiliser stocks rose in trade today after the Modi government raised subsidy on diammonium phosphate (DAP) fertiliser by 140 per cent to protect the farmers from increase in prices.
Share of Deepak Fertilisers rose to a fresh 52-week high of Rs 309, gaining 7.24% on BSE. The share has gained 5.1% in the last 3 days. The stock opened with a gain of 4.3% at Rs 300.55. Deepak Fertilizers share is trading higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages. The stock has gained 191% in one year and risen 87.47% since the beginning of this year. In a month, the share has climbed 28.73%. Later, the stock closed 2.31% to Rs 294.80 on BSE.
Share of another fertiliser manufacturer Chambal Fertilisers zoomed 8.83% to all-time high of Rs 310 on BSE. The stock has risen 115.26% in one year and gained 27.7% since the beginning of this year. Later, the share closed 2.28% higher at Rs 291.35.
Stock of another fertiliser player National Fertilizers opened with a gain of 10.35% at Rs 72.35 on BSE.
The stock has gained after 3 days of consecutive fall. It trades higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages. The share has gained 191% in one year and risen 84.24% since the beginning of this year. The stock closed 5.86% higher at Rs 69.55 on BSE. Share of another industry player Gujarat Narmada Valley Fertilizer rose up to 4.16% to Rs 403 on BSE.
The share has gained 191% in one year and risen 71% since the beginning of this year. Later, the share closed 0.83% lower at Rs 384 on BSE.
The subsidy on DAP fertiliser has been raised to Rs 1,200 per bag from Rs 500 per bag. The decision will cost the exchequer Rs 14,775 crore, in addition to the Rs 80,000 crore spent annually on fertiliser subsidy to farmers.
"It was discussed that the price of fertilisers is undergoing an increase due to the rising prices of phosphoric acid, ammonia, etc internationally. PM stressed that farmers should get fertilisers at old rates despite the international rise in prices," the Prime Minister's Office said in a statement. In 2020, the actual price of DAP was Rs 1,700 per bag. After Centre's subsidy of Rs 500 per bag, the companies were selling fertiliser to farmers for Rs 1,200 per bag.
"Recently, the international prices of phosphoric acid, ammonia, etc used in DAP have gone up by 60 per cent to 70 per cent. So the actual price of a DAP bag is now Rs 2,400, which could be sold by fertiliser companies at Rs 1,900 after considering a subsidy of Rs 500. With today's decision, farmers will continue to get a DAP bag for Rs 1,200," the statement said.
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