India's biggest sugar producer Bajaj Hindustan and other sugar companies surged on the Bombay Stock Exchange today after the government allowed the shipment of five lakh tonne of the sweetener yesterday.
Sugar stocks rallied in today's trade, led by Bajaj Hindustan, which jumped nearly 4% to a high of Rs 69.35 on the BSE. Similarly, Simbhaoli Sugars touched a high of Rs 39.45 and was trading at Rs 38.50, up 3.49% on the BSE.
The Empowered Group of Ministers (EGoM) on food yesterday decided to permit the export of five lakh tonne of sugar as the country's production is estimated to outstrip demand after a gap of two years.
After the announcement, stocks of other sugar companies, including Balrampur Chini Mills (up 4.52%) and Dhampur Sugar Mills (3.76%) rallied.
The other sugar companies that participated in the rally included Dwarikesh Sugar (5.36%), EID Parry (6.66%), Shree Renuka (5.55%), Oudh Sugar (8.84%) and Uttam Sugar(1.99%).
India's sugar production is estimated to rise to 24.2 million tonne in the 2011-12 season (October-September) from around 19 million tonne in the previous year. The annual demand is pegged at 22-22.5 million tonne.
According to industry data, mills have produced around 24 million tonne of sugar till June 15 of the 2010-12 season.
The rally in sugar stocks is in tandem with the rise in the broader market, with both the benchmark indices trading in the positive territory.
The BSE today extended its gains for the fifth consecutive session and rose by 120.04 points, or 0.65%, to 18,612.49 in the first few minutes of trade today.
Similarly, the broad-based National Stock Exchange Nifty index moved up by 35.50 points, or 0.59%, to 5,557.90.
