Sugar stocks advanced 1-19% on Thursday after the UP government decided not to raise the state advisory price (SAP) of cane for the 2014-15 crushing season.
“In a cabinet meeting, presided over by chief minister Akhilesh Yadav, it was decided to maintain the SAP of early ripening variety of sugarcane at R290 per quintal, normal variety at R280 and late variety at R275, which were same as last season,” Rahul Bhatnagar, principal secretary of cane development department, said.
Among sugar scrips, Shree Renuka Sugars (3.69%), Dhampur Sugar Mills (4.80%), Bajaj Hindusthan (10.24%), Oudh Sugar Mills (10.29%), Balrampur Chini (17.2%) and Upper Ganges Sugar & Industries (18.95%) were the major gainers.
According to a Bloomberg data, sugar harvest in India, the world’s biggest producer after Brazil, will probably climb to its highest level since 2012 after farmers increased planting and abundant monsoon rainfall boosted yields.
Production may total 26.25 million metric tonnes in the marketing year that began October 1, according to a survey of 866 farmers across six states by Geneva-based SGS SA for Bloomberg News. That’s the highest since a 26.34 million tonnes production in 2011-2012, according to Indian Sugar Mills Association data. The group forecasts output of 25 – 25.5 million tonnes this season with domestic demand of 24.7 million tonnes.
With output exceeding demand for a fifth year, India may need to subsidise exports to reduce stockpiles, potentially extending a global glut, as per the Bloomberg report.