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Our Bureau

Mumbai, Aug. 5 Sugar stocks surged on Tuesday as the Government fixed the quota for free sale of sugar for August at a level lower than market expectations.

“This move would reduce the supply of sugar in the market, which will in turn drive up the price of sugar, ahead of the festival demand,” said a commodities research analyst at a stock broking firm.

Sakthi Sugars was up 2.63 per cent at Rs 109.4, Balrampur Chini Mills gained 1.83 per cent at Rs 91.7, Bajaj Hindustan Sugar and Industries inched up 1.48 per cent to Rs 41.10;

Bannari Amman Sugars surged up 3.43 per cent to Rs 936, and Vishnu Sugar Mills went up by 5 per cent to Rs 2,248.6.

The Government has fixed the quota for free sale of sugar for this month at 9 lakh tonnes, reports said.

The total sales quota for the quarter ending September 30 has been set at 3 million tonnes by the Government, which monitors this sector. This figure is lower than what it was during the same period last year.

There are reports that sugarcane production may fall further in the next two years, which would again increase the price of sugar.

The expected sugar production for the year 2007-08 is 283 lakh tonnes; this is estimated to fall to 217 lakh tonnes in the year 2008-09.

This could push up the price of sugar to Rs 1,600 per quintal from Rs 1,485 per quintal, said marketmen.

The acreage of sugarcane cultivation in Maharashtra is expected to reduce by 26 per cent in 2008-09.

The sugar production in the State would drop 37 per cent during the same period, said analysts. “The domestic consumption of sugar is estimated to increase from 215 lakh tonnes in 2007-08 to 225 lakh tonnes in 2008-09. This would boost the price of sugar further as now the production of sugar is expected to fall drastically in the next few years,” said the head of research at a brokerage.

More Stories on : Stocks | Sugar

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