Sugar stocks in focus on hike in MSP to Rs 33 per kg

On Thursday, the shares of sugar companies are in focus on the bourses, supported by a rise in the minimum selling price (MSP) of sugar to Rs 33 per kg from Rs 31 per kg. This hike is likely to improve the margins of the sugar companies, going ahead.

This announcement was made on Wednesday in a meeting with a group of ministers. This rise in MSP has been done to help millers clear cane dues of about Rs 22,000 crore to farmers.

As per the data issued by Indian Sugar Mills Association (ISMA), the sugar production of India is likely to be around 320 lakh tonnes in FY21, out of which, India would export around 60-70 lakh tonnes.

Minimum Support Price (MSP) is a form of market intervention by Government of India to insure agricultural producers against any sharp fall in farm prices.

Supported by this favourable announcement, the major sugar stocks were trading in green during Thursday’s trading session. EID Parry (India) gained two per cent, Balrampur Chini Mills gained three per cent, Shree Renuka Sugars gained two per cent, Triveni Engineering & Industries Ltd gained two per cent, Bannari Amman Sugars gained four per cent and Dhampur Sugar Mills gained five per cent.