Sugar stocks continued to be in demand, gaining up to 20 per cent, on hopes of high demand during the festival season and reports that the government is working on a new subsidy scheme to be implemented in the current 2015-16 season to boost export of surplus sugar.
Shares of Dwarikesh Sugar rallied 20 per cent, Shree Renuka Sugars climbed 18.09 per cent and Bajaj Hindusthan Sugar gained 10.62 per cent on BSE.
Similarly, Sakthi Sugars surged 8.24 per cent, Dhampur Sugar Mills gained 7.60 per cent, Oudh Sugar Mills was up 6.63 per cent and Balrampur Chini Mills rose 3.88 per cent.
To infuse liquidity into the sugar sector and facilitate mills make payment to farmers, the UPA government had rolled out a scheme providing subsidy for export of 4 million tonnes of raw sugar in the 2013-14 season (October-September).
The NDA government extended the scheme for export of 1.4 million tonnes of raw sugar in 2014-15. The subsidy was given up to Rs 4,000 per tonne. Under the scheme, mills managed to export only 1.15 million tonnes of sugar in these two seasons.
"The Food Ministry has decided not to extend the scheme further for the current 2015-16 season. Instead, it is working on a new sugar export subsidy scheme," sources had said.
Meanwhile, the government is working on a solution to ensure that cash-starved mills make timely payments of over Rs 12,200 crore dues to farmers, Home Minister Rajnath Singh said yesterday.
Cane arrears were still to the tune of Rs 12,248 crore at the end of the 2014-15 season (October-September) despite government measures, including a soft loan of Rs 6,000 crore, to improve mills' liquidity position, which has been affected due to lower sugar prices and high cane rates.
Sugar production is estimated at record 28.3 million tonnes in 2014-15 marketing year (October-September), as against 24.3 million tonnes in the previous year, while the total annual demand is pegged at 24.5 million tonnes.
