Sugar stocks trading weak on subsidy squeeze may be an anomaly

The combined market capitalisation (m-cap) of the country's top 15 sugar manufacturers was down 2.8 per cent on average on Friday

Sugar production, sugar mills
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Friday’s fall in sugar was, however, an aberration. The sector has been an outperformer due to a combination of higher sugar prices and low raw material (sugarcane) prices

Krishna Kant Mumbai
Sugar stocks retreated on Friday after the central government cut subsidy on sugar exports. The combined market capitalisation (m-cap) of the country's top 15 sugar manufacturers was down 2.8 per cent on average on Friday. In comparison, the benchmark BSE Sensex closed the day with gains of nearly 2 per cent to reclaim the 50,000-level. 

Friday's fall in sugar was, however, an aberration. The sector has been an outperformer due to a combination of higher sugar prices and low raw material (sugarcane) prices. 

The Uttar Pradesh (UP) government - the country's largest sugar-producing state - has not raised cane prices for four years. There has been a steady rise in the margins and profitability of listed sugar companies - a majority of

First Published: May 22 2021 | 01:13 AM IST

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