Shares of sugar manufacturers were trading higher on Friday, outperforming the markets after the government approved subsidy for exporting sugar.
The cabinet approved subsidy of upto Rs 4000 per tonne on exporting sugar upto 1.4 million tonnes.
Mills in India, the world’s biggest sugar consumer, lobbied the government to agree export incentives to help cut large stockpiles after lower world prices thwarted their efforts to sell on the world market.
India, the world’s second biggest sugar producer after Brazil, traditionally produces whites, the refined variety. But mills and trade experts say with the help of government incentives sugar companies can now export raw sugar to standalone Asian and African refineries that turn raws into whites.
The Indian Sugar Mills’ Association (ISMA), a producers’ body of private mills, has forecast output of 26 million tonnes in the year that began in October against 24.4 million tonnes the previous year.
Between October 1 and February 15, mills have produced 16.7 million tonnes of sugar, up from 14.5 million tonnes in the year-ago period.
Shares of most of the manufacturers came in high demand after this development. Riga Sugar, Dhampure Speciality Sugars, Mawana Sugars, Upper Ganges Sugar & Industries, Dharani Sugars, Indian Sucrose, Dwarikesh Sugar and Shree Renuka Sugar advanced 4-8 per cent each.
Source: NDTV Profit