Profit margins of sugar mills likely to rise by 5-6% in one year

4 MT of buffer stocks to help raise sugar prices by 8-9%, reduce inventory cost by 33%

The profit margins of sugar mills are likely to rise by 5-6 per cent in the one year starting August 2019 on expectations of an 8-9 per cent increase in the sweetener's prices due to the provision of four million tonnes (MnT) of buffer stock.

A Crisil study forecasts earnings before interest, depreciation, tax and amortization (EBIDTA) margins of sugar mills to rise by 500-600 bps (5-6 per cent) during the period between August 2019 and July 2020.
 

Faced with mounting pressure on sugar mills to clear dues of cane farmers, the government on July 24 allowed the creation of