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Jan 16, 2012, 02.46 PM IST
India urea prices at $100/T Vs global prices of about $400/T. India has no plans to raise prices of urea, the most widely used soil nutrient in the country, two top sources in the ministry for chemicals and fertilisers said, after media reports said that prices may rise by 40 percent.
"There is no proposal to raise prices of urea," a ministry source said.
Another senior ministry source, corroborated the first official, adding, "the urea prices were revised in the year 2010 and after that, there is no proposal of that sort."
Two newspapers reported on Monday that the government planned to increase prices of urea to reduce a mounting subsidy burden.
Shares in fertiliser makers Chambal Fertilisers , Tata Chemicals , Rashtriya Chemicals and Fertilizers, Coromandel International and National Fertilizers rose 1-8 percent after the reports, but later eased off.
If approved, the price increase will reduce companies' dependency on subsidy, and will be positive for the stocks, said Tarun Surana, analyst at Sunidhi Securities and Finance.
Surana, however said, that any price hike was unlikely ahead of elections scheduled till end-March in five states--namely, Uttar Pradesh, Punjab, Uttarakhand, Manipur and Goa.
Urea consumption is heavily skewed in Uttar Pradesh and Punjab and pricing of the soil nutrient is a key political issue.
Urea accounts for about half of the total 52 million tonnes of fertilisers consumer by Indian farms every year and the country imports about 7 million tonnes of the nitrogenous soil nutrient.
Urea prices were last hiked to 5,310 rupees ($100) per tonne at factory-gate level from 4,830 rupees earlier, the Hindu BusinessLine report said.
The international prices of urea are about $400 a tonne.
($1 = 51.5 rupees)
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