Sugar stocks turn sweet

The news on Street is that the Govt is all set to announce a Rs.8000 crore package to bail out the beleaguered sugar industry.  This includes a Rs.1200 crore expenditure of creating a 3 million tonne buffer stock of sugar and Rs.4400 crore scheme to boost ethanol production capacity of sugar mills.

The Govt is looking at hiking ethanol price by Rs.6-7/litre from the current Rs.40.85/litre which will enable them to clear dues to the farmers.

The scheme also includes providing a 6% interest subsidy to sugar mills for expansion and creating capacity for ethanol and sugar mills are expected to be given 5 years for repaying loans and a moratorium on repayment in the first year.

This package is over and above the financial assistance of Rs 5.50/quintal of sugarcane announced a few weeks ago which cost the Govt 1500 crore.

Following this news, sugar stocks have turned sweet with Balrampur Chini Mills leading the rally. Dhampur Sugar Mills, Ugar Sugar, Triveni Engg, Mawana Sugar, KCP Sugar, Avadh Sugar, Uttam Sugar, Dalmia Bharat Sugar, Bajaj Hindusthan, Sakthi Sugars are all doing well.