Sugar stocks zoom up to 14% after official says govt considering price hike

Shares of sugar companies surged up to 14 per cent on the BSE in Thursday’s intraday trade. KCP Sugar & Industries Corp shares rose by 14.05 per cent; Sakthi Sugars surged 8.69 per cent at Rs 39.40 per share; Dalmia Bharat Sugar and Industries share price gained 7.48 per cent at Rs 434.45 a piece and Dhampur Sugar Mills soared 5.03 per cent at Rs 248.55 per share. 

Others such as Prudential Sugar Corp, Piccadily Sugar & Allied Industries, Balrampur Chini Mills and the Ravalgaon Sugar Farm shot up by 3.48 per cent, 3.62 per cent, 3.54 per cent and 5 per cent, respectively. By comparison the BSE Sensex was up 0.33 per cent higher at 76,858 levels

 

This came after reports emerged that the Government is considering raising the minimum selling price (MSP) of sugar for the upcoming 2024-25 season, commencing on 1st October. 

According to reports, a senior Government official stated that the revision is likely to apply to the next sugar season and not the ongoing one. The official said that the Government will propose a moderate increase, which will fall below the industry's request.  

The industry has been advocating for an MSP of sugar to be set between 40-41 rupees/kg. The official highlighted that although fair cane prices were announced in February, they will only take effect from the upcoming sugar season beginning on October 1.

The sugar industry is optimistic that the Government will adjust the sugar MSP in line with the rise in cane fair and remunerative price (FRP), enhancing the sugar industry's liquidity and facilitating timely payments to cane farmers.