Sugar stocks rally up to 4% as govt introduces formula for production subsidy
Sugar stocks rallied up to 4 per cent in Thursday’s trade after the Union Cabinet approved provision of production subsidy to sugar mills on the basis of actual exports and supply of ethanol.
The sugar subsidy was earlier meant to be disbursed on the basis of estimated exports and ethanol output. The move is seen to be helping the mills offset cost of cane and facilitate timely payment of cane price dues of farmers.
Following the development, shares of KCP Sugar Industries jumped 4.10 per cent to Rs 38.10. Empee Sugar (up 3.80 per cent), Dhampur Sugar (up 3.80 per cent), Dalmia Sugar (up 3.62 per cent) and Thiru Arooran Sugars (up 2 per cent) were the other major gainers on the counter.
Stocks of bigger players such as Balrampur Chini, Shree RenukaBSE 0.59 % and Bajaj Hindusthan Sugar gained up to 1 per cent.
In a release, the government said, “Initially, the export quota target was scaled to 15.70 kg of sugar for each tonne of estimated cane crushing. Now, the export quota would be revised on a scale of 15.70 kg of sugar for each tonne of cane actually crushed by the mills during current sugar season or previously notified minimum indicative export quota (MIEQ) target, whichever is lower.”