Sugar stocks: Sugar rally comes to a grinding halt, some stocks hit lower circuit

NEW DELHI: Sugar stocks tanked up to 5 per cent in Friday’s trade after the government decided to cut sugar export subsidies for the current season, which ends on September 30.

The government subsidy on sugar exports now stands at Rs 4,000 per tonne, said the Ministry Of Consumer Affairs, Food And Public Distribution. The government had earlier approved subsidies of Rs 6,000 per tonne to encourage cash-strapped mills to export 6 million tonnes of sugar in the current season.

Among the key players, shares of Bajaj Hindusthan Sugar fell 4.8 per cent to Rs 10.90,

declined 2.16 per cent to Rs 306.05, Shree Renuka Sugars fell 2,01 per cent to Rs 14.59 apiece.

Among the worst-hit stocks were

, which hit the 5 per cent lower circuit limit at Rs 14.79. Similar was the case with Dharani Sugars, which hit its circuit limit at Rs 11.55. Sakthi Sugars fell 3.08 per cent to Rs 12.60.

“Keeping in view the firm global sugar prices, we have reduced subsidy on sugar exports by Rs 2,000 per tonne to Rs 4,000 per tonne with immediate effect,” Joint Secretary in the Food Ministry Subodh Kumar told PTI.

Observing that there has been a steady increase in global prices of sugar because of likely shortages in the world market, Kumar said, “If there is a further increase in global prices, we will further reduce the subsidy.”

The reduced subsidy rate will be applicable to export agreements executed on May 20 or later, he said.

Commenting on the development, All India Sugar Trade Association (AISTA) Chairman Praful Vithalani said: “The government wishes that some sugar trade should take place without subsidy. Since 5.7 million tonnes of sugar has been contracted already for this year, the world should know that sugar from India will be available without subsidy hereafter.”

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