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March 2, 2001 | Feedback |
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Sector Focus : Fertilisers IndustryFertilisers industry: Post-budget Fertilisers: State of the industry (2000-01) Fertilisers: Tariffs, prices and landed costs
DAP: Di-ammonium phosphate; NT: Not traded 1 Farmgate price from February 29, 2000 2 Fob price 3 Selling price 4 Price per kl 5 CVD on LNG is nil in 2001-02. Source: CRIS INFAC
Fertilisers: Budget impact Impact factors
Notes: Figures in brackets indicate the closing share prices, on February 27, 2001 and February 28, 2001, respectively. neg= negative neut= neutral Source: CRIS INFAC A: In the case of urea, unit wise retention price will be replaced by a 'Group Concession Scheme'. Concession for urea units based on naphtha/FO/LSHS will be linked to international prices of feedstocks. The impact on the industry would depend on the 'Group Concession', which is yet to be announced. B: Removal of surcharge of 10 per cent on customs duty is expected to reduce the cost of imported raw materials (ammonia, phosphoric acid, sulphur and rock phosphate) for phosphatic (SSP) and complex fertilisers (DAP). However, margins will be dependent on the final concession on these fertilisers. C: Urea is exempt from the increase in rail freight. Increase in rail freight is expected to have a negative impact on other phosphatic (SSP) and complex fertilisers (DAP), if the concession on these fertilisers are not increased in line with the increase in the freight cost. D: The reduction of surcharge on corporate tax, from 13 per cent to 2 per cent and the expected decline in interest rates, is expected to have a positive impact on producers. E: Domestic price of caprolactam is expected to decline, due to an expected decrease in the landed cost of caprolactam with the reduction in the effective customs duty, from 32.6 per cent to 24.8 per cent. There is likely to be a negative impact on GSFC, since caprolactam accounts for around 18 per cent of total sales. F: Domestic price of soda ash is expected to decline, due to an expected decrease in the landed cost of soda ash with the reduction in the effective customs duty, from 44 per cent to 24.8 per cent. However, the decrease in the landed cost is expected to be marginal, due to the prevailing anti-dumping duty. There is likely to be a marginal negative impact on Tata Chemicals, since soda ash accounts for 33 percent of total sales. Rediff-CRISIL Budget Impact Analysis
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