Sugar stocks shoot up as govt fixes price for ethanol

Sugar stocks surged as much as 13 per cent today after the government fixed a higher-than- expected price of Rs 48.50-49.50 per litre for procurement of ethanol by oil marketing companies (OMCs).
Sugar stocks gave a thumbs-up to the government's new ethanol procurement mechanism.
Simbhaoli Sugars zoomed 12.79 per cent, while Mawana Sugars soared 6.83 per cent on the BSE.
Among others, shares of Balrampur Chini Mills jumped 4.94 per cent, Bajaj Hindustan (4.52 per cent), Shree Renuka Sugars (4.15 per cent), Dhampur Sugar Mills (3.72 per cent), Dwarikesh Sugar Industries (3.19 per cent) and Triveni Engineering & Industries (2.69 per cent).

In a bonanza for sugar mills, the government yesterday fixed a price of Rs 48.50-49.50 per litre for procurement of ethanol for blending with petrol, a rate much higher than the price oil companies presently pay to buy the sugarcane extract.
In November 2012, the government had mandated compulsory 5 per cent blending of ethanol in petrol but the programme has not extended beyond certain centres because of supply and pricing issues.
The procurement price of ethanol was earlier decided by oil companies and the suppliers of ethanol.
The Cabinet Cabinet Committee on Economic Affairs (CCEA) fixed the delivered price of ethanol in the range of Rs 48.50 per litre to Rs 49.50 per litre, depending upon the distance of sugar mill from the depot/installation of the public sector oil marketing companies (OMCs), an official statement had said yesterday.