Kaveri Seeds slumps over 6%

There is unconfirmed news that the Govt is likely to cut the prices of genetically modified Bt Cotton seeds; the news is that price of 450 gms seed pack is to be brought down from Rs.800 to Rs.740.

There is also the possibility of the trait or royalty fees payable to technology developers getting slashed. The royalty price is included in the sale price and this is likely to be reduced from Rs.49 to Rs.39 per packet.

This is a good move to protect the farmers but will affect the margins of see company, Kaveri Seeds and Monsanto  and their income is expected to fall by at least Rs.50 per packet. Some 5 crore packets are sold every year and industry experts put the loss at Rs.60/packet.

Little wonder then that Kaveri Seeds slumped over 6% to Rs.448 while Monsanto India did not fall much – it went down 0.7% to Rs.2542.35.