Shares of seven fertilizer companies rose by 0.37% to 2.92% at 15:00 IST on BSE after the India Meteorological Department (IMD) retained its previous forecast of good rains for the 2016 southwest monsoon season.
Meanwhile, the S&P BSE Sensex was up 10.69 points or 0.1% at 26,860.32.
Rashtriya Chemicals & Fertilizers (up 1.5%), Gujarat Narmada Valley Fertilizers & Chemicals (up 2.92%), Deepak Fertilisers & Petrochemicals Corporation (up 1.1%), Fertilizers & Chemicals Travancore (up 1.48%), Gujarat State Fertilizers & Chemicals (up 1.73%), Chambal Fertilizers & Chemicals (up 0.37%) and Coromandel International (up 1.94%) rose. National Fertilizers fell 1.35%.
Good rains may boost demand for fertilizers.
Meanwhile, India's weather office India Meteorological Department (IMD) in its second stage monsoon forecast issued after trading hours yesterday, 2 June 2016, said that rainfall over the country as a whole for the 2016 southwest monsoon season is most likely to be above normal. Quantitatively, monsoon season rainfall for the country as a whole is likely to be 106% of the long period average (LPA) with a model error of plus/minus 4%. In its first stage forecast issued on 12 April 2016, the IMD had forecast rainfall to be 106% of the LPA with a model error of plus/minus 5%.
In its region wise forecast, the IMD said that the rainfall is likely to be 108% of LPA in North-West India, 113% of LPA in Central India, 113% of LPA in South Peninsula and 94% of LPA in North-East India, all with a model error of plus/minus 8%. The rainfall over the country as whole is likely to be 107% of its LPA during July 2016 and 104% of LPA during August 2016 both with a model error of plus/minus 9%. The quantum of the rainfall and its spatial and temporal distribution are critical for the country's agriculture.
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The IMD said that the rapidly declining El Nino conditions became weak in early May 2016 and now have turned to neutral ENSO conditions. Recent changes in the atmospheric conditions over the Pacific also reflect the weakening El Nino conditions. Latest forecast from IMD-IITM coupled model indicates about 50% probability of La Nina conditions to establish during the monsoon season. Most of the other models also suggest development of La Nina conditions during the latter part of the monsoon season. El Nino conditions cause deficient rains in India whereas La Nina conditions trigger abundant rains in the country.
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