The Govt, on Satruday, reduced prices of key fertilisers like Diammonium Phosphate (DAP), Muriate of Potash (MOP) and Nitrogen Phosphate and Potash composition (NPK).  

It has reduced DAP price by a minimum of Rs 2,000 per tonne, which is a reduction of Rs.100-150 on per 50 kg bag.  Prices of MOP and NPK have been reduced by Rs.4000/tonne, which is a reduction of 250-300 per 50 kg bag.

The price of DAP, MOP and NPK have been reduced for the first time in 15 years. This is great news for the farmers, especially given the bountiful monsoon but not very good for fertilizer companies as it means a reduction in selling price for them.

Fertiliser stocks are not too happy about this, which have been hitting new highs over the past couple of days. Coromandel International is the top loser since morning, currently down 5% at Rs.254.30, with an intra day low at Rs.251.  Last Thursday, it had hit a new 52-week high at Rs.274.  Coromandel is a NPK producer and given the sharp drop in prices, plus the recent reduction in subsidies, the worry is that margins could get affected. But if volumes surge, this could easily get offset.