Sugar stocks in demand, surge up to 15.2 pct

Written by PTI | Mumbai | Updated: Jun 7 2014, 02:25am hrs
Shares of sugar companies gained as much as 15.2 per cent today after the government said it is examining providing additional interest-free loans of Rs 4,400 crore to cash-starved sugar mills to clear dues to cane farmers.

Dhampur Sugar Mills climbed 15.21 per cent, while Shree Renuka Sugars surged 13.44 per cent on the BSE.

Shares of Triveni Engineering & Industries soared 10 per cent, while Bajaj Hindusthan rallied 9.82 per cent, Balrampur Chini Mills Ltd (7.82 per cent) and Oudh Sugar Mills (4.32 per cent).

The government is also looking at hiking sugar import duty from 15 per cent to 40 per cent to curb cheap imports and increase ethanol blending in petrol to 10 per cent as an effort to improve the liquidity of mills.

"The main concern raised was how to clear Rs 11,000 crore sugarcane dues to farmers at the earliest. A suggestion has been made to extend loans given equivalent to the excise duty paid by the mills in the past three years to five years," Food Minister Ram Vilas Paswan had said yesterday after an informal meeting with other Cabinet ministers.

"Each minister has given suggestions. We have not yet taken any decision...We will discuss among ministries and with the Prime Minister what we can do best for the benefit of both farmers and mills. A cabinet note will be prepared accordingly," he had said.

In December, the government had approved Rs 6,600 crore interest-free loans to the sugar industry exclusively for clearing sugarcane arrears. It decided to give loans via banks equivalent to the excise duty paid by the mills in the past three years.