Eleven sugar stocks rose 4.51% to 13.99% at 14:54 IST on BSE after the Cabinet Committee on Economic Affairs today, 10 June 2015, approved the proposal to provide soft loans to the extent of Rs 6000 crore to the sugar industry.
Among sugar stocks, Oudh Sugar Mills (up 9.78%), Sakthi Sugars (up 13.99%), Bajaj Hindusthan (up 11.04%), Shree Renuka Sugars (up 8.3%), Simbhaoli Sugars (up 9.63%), Andhra Sugars (up 7.11%), Rana Sugars (up 12.08%), Balrampur Chini Mills (up 5.25%), Dhampur Sugar Mills (up 6%), Dwarikesh Sugar Industries (up 4.51%) and KCP Sugar & Industries (up 4.62%) edged higher.
Meanwhile, the S&P BSE Sensex was up 448.94 points or 1.7% at 26,930.19.
The Cabinet Committee on Economic Affairs (CCEA) has provided a one year moratorium on this loan, and will bear the interest subvention cost to the extent of Rs 600 crore for the said period. To ensure that farmers are paid their dues expeditiously, the Government has mandated that banks will obtain from the sugar mill, the list of farmers with bank account details to the extent cane dues are to be paid, so that the same are directly paid into the account of the farmers on behalf of the sugar mills. Subsequent balance if any, will then be credited into the mill account, the Ministry of Consumer Affairs, Food & Public Distribution said in a statement.
Furthermore, in order to incentivize the mills to clear their dues, CCEA has also decided that the approved soft loans will be provided to those units which clear at least 50% of their outstanding arrears before 30 June 2015, the Ministry said in a statement.
In the current sugar year (October 2014-September 2015), the cane price arrears are approximately Rs 21000 crore.
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