The sugar stocks have turned bitter today morning, figuring in the losers list. The losing pack is led by Balrampur Chini Mills which is among the top five losers on the BSE, going down over 6.5% to Rs.59.70, not too far away from 52-week low of Rs.58.80.
The sugar stocks have slipped after the minimum price sugar mills pay to cane growers by Rs 20 per quintal to Rs 275 per quintal for the next marketing year starting October. The FRP, which is the minimum price that sugar mills have to pay to sugarcane farmers, is Rs 255 per quintal for the 2017-18 season. At present, the FRP price is linked to a basic recovery rate of 9.5%, subject to a premium of Rs 2.68 per quintal for every 0.1% increase in recovery rate.
Those in the industry are perturbed as they say that they cannot afford to pay farmers the increased FRP next season without concrete steps being taken to help improve ex-mill sugar prices to at least Rs.35/kg.