Shares of sugar manufacturing companies are under pressure in early morning trades on reports that the Uttar Pradesh (UP) has increased State Advised Price (SAP) for sugarcane procurement by more than 15% to Rs 275-290 a quintal for 2012-13 compared to last year. SAP is the price below which mills cannot buy cane from farmers.
“According to the government, this would translate into total sugarcane payments of Rs 21,500 crore to farmers this crushing season compared to Rs 18,200 crore during 2011-12 – a rise of Rs 3,300 crore higher,” the Business Standard report suggests.
Among the individual stocks, Balrampur Chini Mills has dipped almost 7% at Rs 57 on the BSE. Triveni Engineering and Industries was down 5% at Rs 20, followed by Shree Renuka Sugars (down 4% at Rs 33) and Bajaj Hindustan (down 2% at Rs 27).