Sugar stocks rose on Wednesday after the Cabinet approved a hike of up to 25% in the price of ethanol. The stock of Balrampur Chini Mills rose by 2.10% and ended the session at Rs 77.85 on Wednesday.
Sugar stocks rose on Wednesday after the Cabinet approved a hike of up to 25% in the price of ethanol. The stock of Balrampur Chini Mills rose by 2.10% and ended the session at Rs 77.85 on Wednesday. The share prices of EID Parry rose by 1.66%, Bajaj Hindusthan by 3.92%, Shree Renuka Sugars by 11.30%, Triveni Engineering by 4%, Dhampur Sugar by 9.59% and Dalmia Bharat Sugar by 3.34%.
The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, on Wednesday gave its approval to fix the price of ethanol derived from 100% sugarcane juice at Rs 59.13 per litre from the prevailing price of Rs 47.13 per litre for those mills who will divert 100% sugarcane juice for production of ethanol, thereby not producing any sugar.
CCEA, in a press release, said the decision will serve multiple purposes of reducing excess sugar in the country, increasing liquidity with the sugar mills for settling cane farmer’s dues and making higher ethanol available for Ethanol Blended Petrol (EBP) Programme.
Market participants said the government’s move is an effort to incentivise ethanol production by sugar mills at a time when petrol and diesel prices in India have reached record levels. Further, market participants said this could push many companies to divert sugar business to ethanol.
The price of Brent crude has risen by 12% since August 15. “Sugar manufacturers who are only otherwise dependent on the sugar produce can diversify more output towards ethanol because they will get more realisation for ethanol and as soon as that happens the sugar produces profitability increases,” said an analyst requesting anonymity.