Eight sugar stocks gained 2.62% to 7.08% at 13:15 IST on BSE after the government ratified the methodology used for fixing the export subsidy on raw sugar during April-September 2014.
Meanwhile, the BSE Sensex was up 342.99 points, or 1.22%, to 27,035.12
Bajaj Hindusthan (up 4.86%), Dhampur Sugar Mills (up 3.01%), Sakthi Sugars (up 3.15%), Balrampur Chini Mills (up 3.29%), Triveni Engineering & Industries (up 2.62%), Shree Renuka Sugars (up 4.53%), Simbhaoli Sugar Mills (up 5.3%) and Dwarikesh Sugar Industries (up 7.08%) gained.
The Cabinet Committee on Economic Affairs (CCEA), chaired by the Prime Minister Narendra Modi, yesterday, 17 December 2014, gave its 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, towards marketing and promotion services for raw sugar production.
The incentive rate for bi-monthly periods of April - May, 2014, June-July, 2014 and August-September, 2014 have been finalised respectively at Rs 2277, Rs 3300 & Rs 3371 per MT. Total financial help is expected to be around Rs 200 crore.
In sugar year 2013-14, sugar industry had been saddled with surplus stocks on account of surplus production which has consistently exceeded domestic consumption over the past several years. Due to subdued prices of sugar, both in the domestic and international markets, the industry faced a liquidity crisis on account of surplus stocks. This further resulted in mounting up of cane arrears causing distress among cane farmers.
As a result of the policy initiative, about 7.5 lakh metric tonne (MT) of raw sugar was exported which resulted in significant improvements in liquidity of the sugar industry and clearing up of sugarcane arrears benefitting the cane farmers.
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