Image source: Getty Images
Key points
- Nufarm shares on the rise following partnership agreement
- BP to purchase Nuseed Carinata over the next 10 years
- Commercial production progressing in several countries
The Nufarm Ltd (ASX: NUF) share price is heading north on Tuesday morning. This comes after the agricultural chemicals company announced a strategic partnership with BP.
At the time of writing, Nufarm shares are up 3.15% to $4.59. It's worth noting that despite today's rise, the company's shares have lost almost 6% in value over the past month.
Nufarm advances on growth plans for Nuseed Carinata
The Nufarm share price is rising amid hopes the company's latest news will see penetration into new markets.
In its release, Nufarm advised it has entered into a long-term strategic offtake and market development agreement with BP.
This will see BP purchase Nuseed Carinata oil that it plans to process or sell into growing markets to supply sustainable biofuels.
Nuseed Limited is a wholly-owned subsidiary of Nufarm. Nuseed Carinata is a non-food cover crop, which can be used to produce low-carbon biofuel feedstock. It protects and improves soil between the main crop harvest and the next season's planting. Replacing fossil fuels with oil reduces emissions, and removes atmospheric carbon while restoring soil carbon.
Nufarm noted that increased global demand for biofuels is being driven to achieve global greenhouse gas (GHG) reduction targets.
Under the 10-year deal, BP will compensate Nufarm an agreed sum, along with further payments if certain milestones are met.
Nuseed is currently increasing commercial production in Argentina and planning expansion programs in South America and the United States. Initial research and market development initiatives are also underway in Europe and Australia.
Commenting on the deal possibly fuelling the Nufarm share price today, CEO Greg Hunt said:
Nuseed Carinata is a great example of Nufarm's approach to developing innovative solutions to support sustainable agriculture. This agreement between Nuseed and bp is validation of Nuseed Carinata's potential as an advanced, non-food agricultural feedstock for biofuel production.
As a leading global inputs provider to agriculture, Nufarm is well positioned to help drive and support the expansion of Nuseed's Carinata platform.
About the Nufarm share price
Over the last 12 months, the company's shares have lost around 6%. The Nufarm share price reached a 52-week high of $5.60 in April, before treading lower.
Nufarm has a market capitalisation of roughly $1.69 billion, with approximately 379.96 million shares on its books.
