Shares of sugar companies are trading higher by 2-5% on reports that sugar production in the coming season is likely to decline by 4% due to lower recovery from the standing cane crop and deficient monsoon rainfall.
“Total sugar output might decline to 25 million tones (mt) during the crushing season beginning October, marginally lower than the current year’s estimated production at 26 mt,” according to the latest forecast by the Indian Sugar Mills Association (ISMA).
"Sugar production for 2012-13 season works out to be 250 lakh tonne, of which 78 lakh tonne is expected to be from UP, 76 lakh tonne from Maharashtra, 30 lakh tonne from Karnataka, 25 lakh tonne by Tamil Nadu, 10 lakh tonne each by Gujarat and Andhra Pradesh." ISMA said in its release.
Among the individual stocks, Balrampur Chini Mills and Bajaj Hindustan have rallied 5% each, followed by Shree Renuka Sugars, Dwarikesh Sugar, Thiru Arooran Sugars and Oudh Sugar Mills are trading higher by 1-4% on the Bombay Stock Exchange.