Sugar stocks trade higher as Cabinet to consider Rs 4,500 crore package for sugar industry

Shree Renuka, Bajaj Hindusthan Sugar, Balrampur Chini, Dalmia Sugar, EID Parry, annariamman Sugar, Dwarikesh Sugar, Uttam Sugar, Rana Sugars, Andhra Sugar are some sugar stocks which trading higher ahead of Cabinet meeting

Share price of most of the sugar stocks are trading higher on Wednesday as Cabinet is likely to consider the Rs 4,500 crore package for sugar industry today.

Stocks including Shree Renuka, Bajaj Hindusthan Sugar, Balrampur Chini, Dalmia Sugar, EID Parry, annariamman Sugar, Dwarikesh Sugar, Uttam Sugar, Rana Sugars, Andhra Sugars are rose upto 8 percent in today's trading session.

The Cabinet is likely to consider the Rs 4,500 crore package for the cash-starved sugar sector, which includes doubling production assistance to growers and transport subsidy for export up to 5 million tonnes in the next marketing season starting October, sources said.

With assembly elections due in some states and upcoming general polls in mid-2019, the government has worked out a second package to bail out the sugar industry which is facing a glut-like situation because of record production of 32 million tonnes in the 2017-18 marketing year that ends this month.

Under the proposed policy, the ministry has recommended offsetting cost of sugarcane to sugar mills by increasing the production assistance paid to growers to Rs 13.88 per quintal for the 2018-19 marketing year (October-September) from Rs 5.50 per quintal for this year.

In June, the government had announced a Rs 8,500-crore package for the industry which included soft loans of Rs 4,440 crore to mills for creating ethanol capacity. It will bear an interest subvention of Rs 1,332 crore for this.

Early this month, the government had approved an over 25 percent hike in the price of ethanol produced directly from sugarcane juice for blending in petrol, in a bid to cut surplus sugar production and reduce oil imports.

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