Stocks of the sugar companies Shree Renuka Sugars and Dhampur Sugar Mills surged over 15 per cent on Friday after international sugar prices soared to eight-week high on Thursday on account of tightening supplies. On the domestic front, sugar prices also soared nearly 50 per cent between August 3 and March 3.
Sugar companies shares such as Shree Renuka Sugars and Balrampur Chini Mills closed 14.49 per cent and 8.23 per cent up at Rs 13.91 and Rs 92.75. Other sugar majors Sakthi Sugars and Dhampur Sugar Mills ended 16.01 per cent and 19.38 per cent up at Rs 29.35 and Rs 67.45, respectively.
Analysts said fresh positions built up by traders, supported by pickup in demand from retailers as well as bulk consumers in the domestic spot market, mainly led to the rise in sugar prices at futures trade.
G Chokkalingam, founder, equinomics research & advisory, said, “Firming up of international sugar prices supported sugar stock on Friday on stock exchanges. Also, Maharashtra cane output is likely to go down by 25 per cent due to drought. This is negative for farmers but positive for sugar companies especially for those situated outside Maharashtra.”
Till January 15, 2015, Maharashtra had produced 44 lakh tonne of sugar with 10.6 per cent recovery.