 "Sugar")
Shares of sugar companies were trading higher for the fifth straight day, surging up 20% on Monday in an otherwise subdued market.
Thiru Arooran Sugars, Dwarikesh Sugar Industries, Uttam Sugar Mills, Dalmia Bharat Sugar and Industries and Ponni Sugars (Erode) were up in the range of 14% to 20%, while Bannari Aman Sugars, Balrampur Chini Mills, EID Parry (India), Andhra Sugars and KCP Sugar gained between 5% and 9% on the BSE. In comparison, the S&P BSE Sensex was down 0.41% at 34,589 points at 11:43 am.
In past one week most of the sugar companies have outperformed the market by surging up to 60% against a marginal 0.42% rise in the benchmark index.
In order to stabilize sugar prices at reasonable level and to improve the liquidity position of the mills thereby enabling them to clear the cane price arrears of farmers, for the current sugar season 2017-18 (SS17-18), Central Government took the various measures including regulating the minimum selling price (MSP) of sugar, soft loans, export subsidies, cane price assistance, higher ethanol pricing and blending mandates.
From a long-term perspective, the Government announced a biofuel policy that will encourage the sugar industry to manufacture sugar from B heavy molasses, thereby reducing sugar production.
Ethanol contributes 10-15% of sugar mills annual turnover. Uttar Pradesh’s mills contribute nearly half the country’s ethanol supply. Since ethanol is manufactured from molasses, a by-product of sugar, the mills do not incur any extra cost on the raw material. Therefore, higher realisation from ethanol would add to the profitability of the Sugar mills, according to EID Parry.
"In SS18-19, with the export quota announced well in advance and a slew of measures including raw material subsidy and transport subsidy, exports are expected to get a boost," according to Rating agency CRISIL.
Thiru Arooran Sugars, Dwarikesh Sugar Industries, Uttam Sugar Mills, Dalmia Bharat Sugar and Industries and Ponni Sugars (Erode) were up in the range of 14% to 20%, while Bannari Aman Sugars, Balrampur Chini Mills, EID Parry (India), Andhra Sugars and KCP Sugar gained between 5% and 9% on the BSE. In comparison, the S&P BSE Sensex was down 0.41% at 34,589 points at 11:43 am.
In past one week most of the sugar companies have outperformed the market by surging up to 60% against a marginal 0.42% rise in the benchmark index.
In order to stabilize sugar prices at reasonable level and to improve the liquidity position of the mills thereby enabling them to clear the cane price arrears of farmers, for the current sugar season 2017-18 (SS17-18), Central Government took the various measures including regulating the minimum selling price (MSP) of sugar, soft loans, export subsidies, cane price assistance, higher ethanol pricing and blending mandates.
From a long-term perspective, the Government announced a biofuel policy that will encourage the sugar industry to manufacture sugar from B heavy molasses, thereby reducing sugar production.
Ethanol contributes 10-15% of sugar mills annual turnover. Uttar Pradesh’s mills contribute nearly half the country’s ethanol supply. Since ethanol is manufactured from molasses, a by-product of sugar, the mills do not incur any extra cost on the raw material. Therefore, higher realisation from ethanol would add to the profitability of the Sugar mills, according to EID Parry.
"In SS18-19, with the export quota announced well in advance and a slew of measures including raw material subsidy and transport subsidy, exports are expected to get a boost," according to Rating agency CRISIL.
