Sugar bucks the trend

Sugar companies survived the market crash on Monday on huge buying, buoyed by the government's plans to provide export subsidy to millers. Investors also cheered the government's plan to build a 2 million buffer stock for sugar.

Bajaj Hindusthan rose by 1.36 per cent to Rs 197.60, while Balrampur Chini ended up by over two per cent at Rs 67.25 on significant volumes. Sakhti Sugar was up by 2.53 per cent to Rs 103.35, while the shares of Shree Renuka Sugars ended higher by 0.97 per cent at Rs 472.45.

Sugar stocks have been battered the most in recent times as the prices of sugar fell by about 40 per cent this season.The news of the government's decision to procure 1061.046 million litres of ethanol at a flat rate of Rs 21.50 per litre for the next three years also boosted the shares of sugar companies, analysts said.

The benchmark BSE Sensex plunged by 616.73 points or 4.73 per cent on fears that the cash reserve ratio hike by the Reserve Bank of India would slow down India Inc's earnings momentum.

The government said last week that it would procure sugar at the rate of Rs 13,040 per tonne from sugar mills located near the coastal area and at Rs 14,050 per tonne from the coastal area to create a buffer stock of two million.