Sugar stocks in huge demand; surge up to 20%

Sugar stocks saw hectic buying today, surging up to 20 per cent, following reports that the government is working on a new subsidy scheme to be implemented in the current 2015-16 season to boost export of surplus sugar and help mills clear dues of over Rs 12,000 crore to farmers.
Sakthi Sugars zoomed 19.74 per cent to Rs 18.20 at BSE.
Shares of Dwarikesh Sugar soared 12.96 per cent, Bajaj Hindusthan Sugar surged 12.95 per cent and Shree Renuka Sugars jumped 12.91 per cent.
Among others, Oudh Sugar Mills climbed 8.82 per cent and Balrampur Chini Mills gained 8.71 per cent.

To infuse liquidity into the sugar sector and facilitate mills make payment to farmers, the UPA government had rolled out a scheme providing subsidy for export of 4 million tonnes of raw sugar in the 2013-14 season (October-September).
The NDA government extended the scheme for export of 1.4 million tonnes of raw sugar in 2014-15. The subsidy was given up to Rs 4,000 per tonne. Under the scheme, mills managed to export only 1.15 million tonnes of sugar in these two seasons.

"The Food Ministry has decided not to extend the scheme further for the current 2015-16 season. Instead, it is working on a new sugar export subsidy scheme," sources had said.

Meanwhile, the government is working on a solution to ensure that cash-starved mills make timely payments of over Rs 12,200 crore dues to farmers, Home Minister Rajnath Singh said today.
"Sugarcane farmers' issue (cane arrears) is a serious issue. The government approved a Rs 6,000 crore soft loan to facilitate mills make payment to farmers, but it has not been much successful. We are discussing this issue and will find solution," Singh said.
Cane arrears were still to the tune of Rs 12,248 crore at the end of the 2014-15 season (October-September) despite government measures, including a soft loan of Rs 6,000 crore, to improve mills' liquidity position, which has been affected due to lower sugar prices and high cane rates.

Sugar production is estimated at record 28.3 million tonnes in 2014-15 marketing year (October-September), as against 24.3 million tonnes in the previous year, while the total annual demand is pegged at 24.5 million tonnes.