Ahead of the festive season as the best season for sugar begins, the Govt did its bit by announcing an export subsidy for 60 lakh tonnes of sugar at a cost of Rs 6,268 crore.
The subsidy will be directly transferred to farmers’ accounts on behalf of sugar mills against cane dues. The payout is set at Rs 10,448/mt for 2019-20 sugar season.
After increasing the MSP of sugar in Febriary by Rs.2 to Rs.31 in Feb, this move is expected to bring a lot of cheer to the sector. Apart from helping clear the surplus inventory of sugar, it will also induce liquidity to the tune of Rs.18,000 crore, inclusive of the subsidy amount. Plus the expected global sugar deficit of some 40 lakh tonnes is like sugar on the cake.
Sugar stocks are naturally in a tizzy. Shree Renuka Sugar, Triveni Engineering, Bannari Amman, Dhampur Sugar, Bajaj Hindusthan, Dalmia Bharat, Dwarikesh Sugar, KCP Sugar are all up in the green.