Sugar stocks turn sweet on buzz of subsidy for cane sold to mills

In a bid to relieve domestic sugar producers, the Government of India is likely to provide financial assistance to sugarcane farmers.

Sugar stocks were buzzing on Tuesday on the back of news reports that government is mulling a proposal to pay approximately Rs. 55 per tonne of sugarcane sold to the sugar mills. This move would act as cushion for the sugar industry which is currently going through severe pain due to low sugar prices in the international market.

Recently, to help local sugar producers, government reduced the export duty on sugar from 20 per cent to nil. However, due to lower sugar prices in the global market sugar producers still face losses.

With this expected support from government, at 11:45 hours on Tuesday, sugar stocks including Dwarikesh Sugar Industries jumped as much as 10.70 per cent and was trading at Rs. 28.45 per share. Balrampur Chini Mills was up by 6.85 per cent at Rs. 81.10 per share, Rana Sugars rose by 7.99 per cent and trading at Rs. 5.54 per share, while Ugar Sugar rose by 3.32 per cent and was at Rs. 18.65 per share.