Sugar scrips surge on low import talks; Bajaj Hindusthan up

MUMBAI: Shares of sugar companies shot up on Tuesday on speculations that Indian producers may go slow on imports of raw sugar as prices have climbed to the highest in almost three years. For Indian producers buying the commodity overseas at current prices is not profitable.

The overall demand for the commodity is seen higher compared to supply resulting in higher prices for the sweetener. According to experts, prices could jump 20 per cent in the next six months and remain strong for next three years.

The key drivers for such a strong up-cycle are (1) very low production in current season compared to consumption (2) lack of scope for further reduction in dealer stock level and (3) increased cost of production as well cost of import.

Raw sugar in New York surged to the highest since July 26, 2006, last week on speculations that decline in India���s sugar output may worsen the global supply deficit.

On the NSE at 2:21 pm, Bajaj Hindusthan surged 25.60 per cent, Balrampur Chini gained 8.07 per cent, Triveni Engineering was up 19.37 per cent and Renuka Sugar jumped 9.85 per cent.