Sugar stocks surge after govt removes curbs
Stocks of sugar companies jump over 9% after govt take steps to remove curbs on domestic sugar supplies
Mumbai: Shares of sugar manufacturers on Friday ended up to 9% 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 Ltd gained 8.87%. Bajaj Hindusthan Ltd settled 0.7% up and Shree Renuka Sugars Ltd rose by 2.40%.
Sugar stocks had surged by up to 16% in early trade .
Among others, Balrampur Chini Mills Ltd climbed 3.24%, Triveni Engineering and Industries Ltd rose 1.87%, Dwarikesh Sugar Industries Ltd gained 2.64%, EID-Parry (India) Ltd rose 1.83% and Eastern Sugar and Industries Ltd gained 2.09%.
The decision to partially decontrol the sugar sector, the only industry left under government control, was taken by the Cabinet Committee on Economic Affairs (CCEA) on Thursday.
The government has partially decontrolled the ₹ 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 ₹ 20 per kg to the government. After Thursday’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 ₹ 5,300 crore, while the industry will save about ₹ 3,000 crore per year.
The BSE benchmark Sensex ended at 18,450.23, down 59.47 points.
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