The Nufarm Limited (ASX: NUF) share price has surged 3.26% this morning after an article in the Australian Financial Review (AFR) covering the company's plant-based omega-3 canola production.
What does omega-3 have to do with Nufarm?
Nufarm, alongside the CSIRO and Grains Research & Development Corporation, has developed the world's first plant-based source of long-chain omega-3 fatty acids.
On 13 February 2018, Nufarm announced it had received the world's first regulatory approval for its omega-3 products from Australian regulators and is awaiting approval from the US Food and Drug Administration (FDA) for human consumption which could unlock a huge international market.
According to the CSIRO, the long-chain canola developed through the joint research has excellent DHA levels and a desirably high omega-3 to omega-6 ratio in a more sustainable and commercially viable product than the current reliance on fish stocks.
Commercial production of omega-3 canola is expected this year and is awaiting approval from the Food and Drug Administration (FDA) for human consumption of the products.
What was in the article?
With no specific news out from Nufarm today, it looks like the AFR article has seen Nufarm volumes increase and driven the price up in early trade.
According to the article, Nufarm's omega-3 canola, developed in partnership with the CSIRO and the Grains Research & Development Corporation over the last 15 years or so, is estimated to be worth $750-$1 billion for the company.
Estimates from analysts quoted in the article suggest that the omega-3 canola "gold mine" could be worth as much as half of Nufarm's current $5.39 share price and it appears that these statistics have excited investors and seen the share price soar higher.
Is the Nufarm share price a Buy?
The Nufarm share price continues to be under pressure from drought conditions in Australia, falling 8% since the start of the year and 35% in the last year alone.
The crop protection and seed company remains a long-term growth play for those willing to jump into it, but we've seen similar pressure on fellow agribusiness stocks including Elders Ltd (ASX: ELD) and Costa Group Holdings Ltd (ASX: CGC).
For those who aren't so bullish on the Aussie agriculture and a breaking of the drought, I'd check out these top growth shares that have been tipped as market beaters.
