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Sugar shares in demand on buzz of hike in import duty

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Shares of 16 sugar companies rose by 4.04% to 11.44% at 13:54 on on reports the government will raise import duty on sugar to 40% from 15% currently.

Shree Renuka Sugars (up 11.44%), & Industries (up 9.97%), Bajaj Hindusthan (up 9.87%), Balrampur Chini Mills (up 9.11%), Mills (up 8.71%), Triveni Engineering and Industries (up 8.35%), EID Parry (up 6.52%), Empee Sugars (up 5%), & Industries (up 5%), Simbhaoli Sugars (up 4.96%), Rana Sugars (up 4.93%), (up 4.92%), (up 4.91%), Sakthi Sugars (up 4.85%), KCP Sugar & Industries Corporation (up 4.67%) and DCM Shriram Industries (up 4.04%), edged higher.

The S&P Sensex was down 169.74 points, or 0.68% at 24,935.77.

In a move to bail out the ailing sugar industry, food minister Ram Vilas Paswan reportedly allowed an import duty hike from 15% to 40%.

While taking the decision at a second high-level meeting on Monday, 23 June 2014, the food minister also extended sugar export incentives till September 2014. In addition, ethanol blending with petrol was also raised to 10% from 5%.

According to reports, sugar body ISMA hailed the decision saying the organisation was asking for this relief for the last 18 months. ISMA director general Abinash Verma told the media that sugar prices will go up by Rs 3 per kg in near term. The move does not need an approval from Cabinet as Finance Ministry can take a final call on the matter, he said.

The food minister later told the media that sugar mills will get an additional interest free loan of Rs 4400 crore, but mill owners must repay farmers their dues worth Rs 11000 crore. The proposed relief to sugar mills will be implemented once the owners give guarantee to repay farmers, Paswan said.

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First Published: Mon, June 23 2014. 14:01 IST