The sugar industry surely seems to have a lot to celebrate; every time elections come calling, this industry, along with fertilizer are sue shot gainers.
After hiking the price of ethanol last week, providing financial assistance to sugar mills to create ethanol capacity and giving a Rs.8500 crore bailout package in June to sugar mills, more came in yesterday late evening.
The Cabinet Committee on Economic Affairs approved a Rs 5,500 crore package to address the surplus production and stock of sugar in the country.
A total assistance of Rs 5,538 crore has been approved to offset cost of cane and facilitate export. It will provide financial assistance of Rs.13.88/quintal cane crushed in 2018-19 marketing year to offset the cost of cane, as against Rs 5.50/ quintal announced for the current 2017-18, ending this month.
In addition to this, a transport subsidy of Rs 1,000 per tonne will be given for mills located within 100 kms from the ports, Rs 2,500 per tonne for mills located beyond 100 kms from the port in the coastal states and Rs 3,000 per tonne for mills located in other than coastal states or actual expenditure, whichever is lower.
Following this, sugar stocks have tanked as profit booking came in; the stocks had ramped up quite a bit in anticipation of this event and once it has happened, punters are seen exiting.
KCP Sugar & Industries is up 1.5%, Dhampur Sugar Mills is down 2%, Bajaj Hindusthan Sugar is 1.5%, Triveni Engineering & Industries is down 2%, Ponni Sugars (Erode) is up 2%, Rajshree Sugars & Chemicals is down 5%, Balrampur Chinni is down 1% and Avadh Sugar is down over 4%.