Agri stocks soar up to 10% after government hikes minimum support price of kharif crops
Stocks such as Kaveri Seeds, Mangalam Seeds, LT Foods, Kohinoor Foods, Chambal Fertiliser, Deepak Fertilisers, and RCF, among others, gained 1-10 percent.
July 04, 2018 / 01:29 PM IST
Agriculture, forestry and fishing sector recorded a growth of 3.4 percent.
Shares of agriculture-related stocks rose on Wednesday as investors were upbeat on government's decision to hike minimum support price.
Stocks such as Kaveri Seed, Mangalam Seeds, LT Foods, Kohinoor Foods, Chambal Fertiliser, Deepak Fertilisers, and RCF, among others, gained 1-10 percent.
The Cabinet Committee on Economic Affairs has hiked the minimum support price on paddy by around Rs 250 per quintal.
Further, CNBC-TV18 reported that fine paddy’s MSP could be raised to Rs 1,770 per quintal, while common paddy MSP could be raised to Rs 1,750.
Management of LT Foods told CNBC-TV18 that the move will strengthen prices of Basmati rice in the Indian market. The company is waiting to see how other countries react to this news as well. It is expecting an impact on experts of non-basmati rice.
Meanwhile, Kohinoor Foods expects impact on exports if other nations don’t increase rise prices. Going forward, it expects non-basmati rice to become uncompetitive by USD 40-50.
Last week, Prime Minister Narendra Modi had announced that the Cabinet will approve the increase in MSP in its upcoming meeting. In this year’s general budget, the government had announced that it would fix a support price at least 1.5 times of the cost of the production. This has been the BJP’s poll promise since the 2014 general elections.