Sugar shares rally on policy action

Bajaj Hindustan,Balrampur Chini, Shree Renuka, Upper Ganges, Dhampur Sugar and Oudh Sugar are up 3- 12% on BSE.

Shares of sugar manufactures are in demand and trading higher by up to 12% on the bourses. Bajaj Hindustan, Balrampur Chini Mills, Shree Renuka Sugars, Upper Ganges Sugar and Industries, Dhampur Sugar Mills and Oudh Sugar Mills are up 3- 12% on the BSE. The benchmark S&P BSE Sensex was up marginally 0.03% or 9 points at 28,018 at 1116 hours.

In a major relief to private sugar mills, the Uttar Pradesh cabinet on Wednesday decided not to increase sugarcane prices for the 2014-15 crushing season.

The government has also announced an easy payment schedule and perceptibly indemnifying mills for any fall in the prices of sugar and other byproducts during the season, a Business Standard report suggests.

Meanwhile, as per a Reuters report, food minister Ram Vilas Paswan said he expects sugar mills to soon start operations in the biggest cane producing state of Uttar Pradesh.

Hit by a sharp rise in state-fixed cane prices and falling sugar prices, mills earlier this year threatened not to start operations in the new season that began in October. A senior government official on October 29 said mills were expected to start functioning from November, added report.

According to Bloomberg reports the government will refrain from subsidizing raw sugar exports. The government announced a subsidy for raw production and exports in February to help mills clear dues to farmers.

Among individual stocks, Upper Ganges Sugar and Industries has rallied 12% to Rs 40.60, followed by Balrampur Chini Mills (10% at Rs 59.50), Bajaj Hindustan (8% at Rs 22.20), Oudh Sugar Mills (7% at Rs 21.90), Dhampur Sugar Mills (4% at Rs 49.60) and Shree Renuka Sugars (3% at Rs 18.20).