Sugar stocks gain up to 9% at close

MUMBAI: Shares of sugar manufacturers today ended up to 9 per cent higher on BSE after the government partially decontrolled the sector by giving freedom to millers to sell the sweetener in the open market.

DCM Shriram Industries gained 8.87 per cent. Bajaj Hindusthan settled 0.70 per cent up and Shree Renuka Sugar rose by 2.40 per cent.

Sugar stocks in the early trade had surged by up to 16 per cent.

Among others, Balrampur Chini Mills climbed 3.24 per cent, Triveni Engineering & Industries (1.87 per cent), Dwarikesh Sugar Industries (2.64 per cent), EID Parry (1.83 per cent) and Eastern Sugar & Industries (2.09 per cent)

The decision to partially decontrol the sugar sector, the only industry left under the government control, was taken by the Cabinet Committee on Economic Affairs (CCEA) yesterday.

The government has partially decontrolled the Rs 80,000- crore sugar sector by giving freedom to millers to sell in the open market and removed their obligation to supply the sweetener at subsidised rates to ration shops.

Mills at present have to sell a portion of the sweetener they produced at a fixed rate of about Rs 20 per kg to the government. After yesterday's decision, they are free to sell all of their produce in the open market.

The decision will lead to government's annual sugar subsidy doubling to Rs 5,300 crore, while industry will save about Rs 3,000 crore per year.

In the broader market, the BSE benchmark Sensex ended at 18,450.23, down 59.47 points.