Sugar stocks sweeten, surge up to 18% on report export rules may change

NEW DELHI: Sugar stocks surged up to 18 per cent on Wednesday amid reports that the government was considering bringing in mandatory export rules, which will pave the way for compulsory export of millions of tonnes of the sweetener.

Tracking the news, at least 16 sugar stocks listed on the BSE settled with 5 per cent and above gains.

Dwarikesh Sugar settled 16.73 per cent higher at Rs 32.80. Ponny Sugars surged 14.95 per cent to close at Rs 167.60. Parry Sugar, Dalmia Bharat Sugar, Mawana Sugars added between 11 per cent and 14 per cent.

Dalmia Bharat Sugar was in fact, up 18.1 per cent in intra trades.

Simbhaoli Sugars, Riga Sugar, ​Sakthi Sugars and KM Sugar Mills gained between 8.30 per cent 10.50 per cent.

Bajaj Hindustan, Bannari Amman Sugars, Balrampur Chini and Shree Renuka Sugars rose between 7 per cent and 7.50 per cent. Rajshree Sugars and KM Sugar Mills rose between 10 per cent and 15 per cent. Sugar major and B soared 9.6 per cent and 9.2 per cent, respectively.

Oudh Sugar Mills, Dhampur Sugar Mills and Triveni Engg remained some other gainers.

The new rule could be introduced from the start of the next crop year on October 1, Reuters reported.

The rules, if implemented, would support sugar prices in the domestic market.

Sugar production in India is estimated at a record 28.3 million tonnes in 2014-15 marketing year (October-September), compared with 24.3 million tonnes in the previous year. The total annual demand is pegged at 24.5 million tonnes.

Ex-mill sugar prices have fallen to below Rs 20/kg in the country, while the cost of production is over Rs 30/kg, PTI reported last week.

A final decision rests with Prime Minister Narendra Modi, who discussed the politically-sensitive issue at a weekend meeting with ministers, officials and sugar mill bosses, Reuters report said citing two government sources.