Fertilisers stocks are on a roll in today's trade (July 30, 2021). This is on news of China suspending exports of fertilizers. As per the statement of the National Development and Reform Commission (NDRC) on Friday on its website, the key fertilizer companies in China would temporarily suspend exports to ensure adequate supplies in the domestic market.
Now as Chinese companies' would stall exports, companies in India in competition with Chinese majors in the area of fertilizers like RCF will be the major beneficiary. Other companies' into fertilizer exports in India are Chambal and Coromandel.
As per the customs data, the country is the chief exporter of phosphate and transported 3.2 million tonnes of diammonium phosphate fertilizer in the H1CY21 to countries including India and Pakistan and also exported urea (2.4 million tones). Now the latest curbs in export are owing to rise in prices there and hence such a decision has been taken to support the domestic agri market of China. Notably fertilizer prices in China have hit record high levels this year owing to robust demand from global economies, high energy expenditure and lower production in domestic markets.
Individually, fertilizer stocks are up between 1-7%. Stocks like Fertilizers & Chemicals Travancore Ltd.was last trading higher by over 6%, others stocks moving up in a similar scale have been Madras Fertilisers, Coromandel and Nagarjuna Fertilisers.
The momentum in Indian fertilizers scrips has picked as with the stoppage of imports, the domestic scale of production of these companies' shall pick up.