Indian fertiliser manufacturers' shares rallied on Friday, after China reportedly asked some of its key fertiliser firms to suspend exports to ensure enough domestic availability.
China’s National Development and Reform Commission (NDRC) said it had summoned some of the local fertiliser firms for a discussion against hoarding and speculation, according to a report by news agency Reuters. The agency did not identify the companies.
Shares of Coromandel International 5.89 percent to end at Rs 915.10 apiece on BSE, having soared as much as 6.94 percent in intraday trade. Deepak Fertilisers & Petrochem jumped 4.98 percent to settle at Rs 432.05.
Deepak Nitrite hit a 52-week high during the session before settling with a gain of 7.36 percent at Rs 2,038.75 for the day. Gujarat State Fertilizers also hit a 52-week high before giving up some of those gains to shut shop up 3.38 percent at Rs 122.25.
While Chambal Fertilisers & Chemicals rose 1.75 percent to Rs 305.15, Southern Petrochemicals climbed 4.97 percent to finish at Rs 64.40.
Beijing is trying to tackle the soaring prices of major raw materials in the country, primarily because it directly impacts the nation’s food security, which is under a novel threat due to floods in the central province of Henan.
Henan accounts for almost a third of the supply of wheat supply in China, and a tenth of the production of corn, vegetable and pork. As of Monday, nearly 2.5 million hectares of crop fields were affected by the floods, raising concerns of food inflation and security.
China is a major consumer and producer of fertilisers and its prices have hit record highs this year amid strong overseas demand, lower current domestic production, and high energy costs.
Prices of urea, an important fertiliser, have hit record-highs on China’s Zhengzhou Commodity Exchange. Urea futures eased nearly 3 percent on Friday after scaling a record high of 2,616 yuan the previous day.
India also depends on China for urea imports. It imports around 25 percent of urea, 90 percent of phosphates (DAF fertilisers), and 100 percent of potash. Out of these, 30-35 percent of the imports come from China.
First Published: IST