Sugar stocks surge 3-7% as Cabinet approves export subsidy worth ?3,500 crore

Sugar

MUMBAI: Shares of sugar producers rose 3-7% after the Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved assistance of about ?3,500 crore export subsidy.

Stocks of Rana Sugars, Sakthi Sugars, Uttam Sugar Mills, Dhampur Sugar Mills, Balrampur Chini Mills, Dalmia Bharat Sugar, EID Parry surged in trade today.

According a release by the ministry of corporate affairs the subsidy aims to cover expenses on marketing costs, including handling, upgrading and other processing costs and costs of international and internal transport and freight charges on export of up to 60 lakh tonne of sugar limited to Maximum Admissible Export Quota (MAEQ) allocated to mills for 2020-21 (Oct-Sep) season. The move is also expected to benefit 5 crore sugarcane farmers and 5 lakh workers employed in sugar mills and ancillary activities.

Care Ratings in a note to clients said, “With the announcement of sugar export subsidy, domestic sugar prices may see some upside in the coming months as the subsidy will enable India to offload the excess stock. International sugar prices, on the other hand, are expected to witness some pressure when sugar exports from India would start coming in.”

The export subsidy will help trim the country’s surplus and also enable payment of dues to sugarcane farmers. The subsidy assistance will cost the government ?3,500 crore and will be directly credited into farmers’ accounts on behalf of sugar mills against cane price dues and subsequent balance, if any, would be credited to mill’s account, according to a release by ministry of consumer affairs.

News Source: livemint

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