Sugar stocks rally in today’s trade, here is why

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Updated: Nov 17, 2015 5:37 PM

Shares of sugar majors such as Shree Renuka Sugars, EID-Parry and Mawana Sugar climbed 20 per cent, 9.49 per cent and 9.95 per cent, respectively, on Tuesday.

Sugar priceShares of sugar majors such as Shree Renuka Sugars, EID-Parry and Mawana Sugar climbed 20 per cent, 9.49 per cent and 9.95 per cent, respectively, on Tuesday. (Reuters image for representation only)

Sugar stocks remained in limelight on Tuesday after media reports stated that the government is planning to offer a subsidy of Rs 1,200 crore to farmers. Also, expectation of fall in output amid pick up in demand in spot market supported sentiments for sugar stocks.

Shares of sugar majors such as Shree Renuka Sugars, EID-Parry and Mawana Sugar climbed 20 per cent, 9.49 per cent and 9.95 per cent, respectively, on Tuesday.

Uttam Sugar Mills and Simbhaoli Sugars closed 9.93 per cent and 8.42 per cent higher than their previous close.

Sakthi Sugars, Dharani Sugars, Balrampur Chini, Dwarkesh Sugar, Simbhaoli Sugars are some of the stocks that hit their 52-week highs on Tuesday.

India’s sugar output is estimated to decline by 4.62 per cent to 26.8 million tonnes in the 2015-16 marketing year (October-September), says an ICRA report.

The estimate is, however, higher than the government’s projection of 26 million tonnes of sugar output this year but slightly lower than industry body ISMA’s estimate of 27 million tonnes for the same period. The country had produced 28.1 million tonnes of sugar in the 2014-15 marketing year.

In the past four trading sessions, share price of Mawana Sugars, Uttam Sugar Mills, Simbhaoli Sugars and Oudh Sugar Mills jumped 49.4 per cent, 48 per cent, 44.8 per cent and 42.4 per cent to Rs 21.10, Rs 30.20, Rs 20.20 and Rs 42.35, respectively, till November 16.

(With inputs from PTI)

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