Sugar stocks continued to trade higher on Friday despite the food and consumer affairs ministry proposing a 25 per cent duty on exports of sugar to boost domestic supplies and stem a rise in prices witnessed in recent months.
Shares of sugars companies such as Andhra Sugars, Bajaj Hindusthan Sugar, Bannari Amman Sugars, Dwarikesh Sugar Industries and Dhampur Sugar Mills soared by 7.65 per cent, 5.54 per cent, 6.09 per cent, 6.53 per cent and 6.02 per cent, respectively.
Other sugar companies such as Uttam Sugar Mills and Upper Ganges Sugar & Industries surged 19.01 per cent and 20 per cent, respectively.
On the domestic front, sugar prices continued to rise for the third straight day at the wholesale market in the national capital on Friday following sustained buying by retailers, stockists and bulk consumers. Besides, thin supplies from mills too supported the upside. Marketmen said sustained buying by retailers, stockists and bulk consumers driven by summer season, mainly kept prices in green zone.
Food minister Ram Vilas Paswan stated that there is an increasing trend in the price of sugar in the international market and traders may increase the export of sugar to make profit. Therefore, to keep the export of sugar in control, it is purposed to levy 25 per cent custom duty on export of sugar. He further added, this move will keep sufficient availability of sugar in domestic market and the price will be under control.
Reportedly the global prices have increased by 50 per cent in last three months due to disruption in supply from Brazil. India exported 1.4 million tonnes of sugar so far in the 2015-16 marketing year (October-September). Whereas, retail sugar prices last month had crossed Rs 40 per kg due to 11 per cent fall in domestic sugar output in the ongoing 2015-16 season.
India is the world’s second largest producer of sugar with estimated production of about 25 million tonnes in 2015-16, as against 28.3 million tonnes last year. Sugar production is likely to be lower this year due to a drought in major growing regions.
(With agency inputs)