 "Sugar stocks hog limelight; Balrampur Chini, Simbhaoli Sugars up 5%")
Shares of sugar companies are gaining in today’s trade after the government ratified the methodology used for fixing the export subsidy on raw sugar during April-September period of the 2013-14 marketing year.
The shares of Simbhaoli Sugars are up over 5%. Balrampur Chini and Bajaj Hindusthan posted a 3% and 5% rise, respectively. Shree Renuka Sugars has jumped 4.5% on the BSE.
Earlier, the government announced subsidy for exports of raw sugar up to 40 lakh tonnes during 2013-14 and 2014-15 marketing years to aid the cash-starved industry to clear cane arrears to farmers.
The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, has given approval to "ratify the methodology adopted to recalculate the incentive rate for bi-monthly periods of April-May 2014, June-July 2014 and August-September, 2014", an official statement said.
"The incentive rate for bi-monthly periods of April-May 2014, June-July 2014 and August-September 2014 have been finalised respectively at Rs 2,277, Rs 3,300 and Rs 3,371 per tonne. Total financial help is expected to be around Rs 200 crore," the statement added.
However, in December, sugar prices dropped five per cent to a three-year low, owing to a sudden spurt in arrivals from mills. Average ex-factory prices in Maharashtra declined to Rs 2,480 a quintal from Rs 2,612 a quintal in November, according to data from the Indian Sugar Mills Association (Isma).