Business Daily from THE HINDU group of publications
Thursday, Dec 27, 2007
ePaper | Mobile/PDA Version
Business Daily from THE HINDU group of publications Thursday, Dec 27, 2007 ePaper | Mobile/PDA Version |
|
|
|
|
|
|
|
Markets
-
Stocks Agri-Biz & Commodities - Sugar
BL Research Bureau Stocks of sugar companies with significant production capacities in Uttar Pradesh have flared up sharply in recent days. Stock prices have been fuelled by the expectation that mills would obtain relief from the State Advised Price (SAP) of Rs 125 per quintal — fixed by the State Government for procurement of cane in this season. The Allahabad High Court has reportedly asked the State Government to review the fixation of cane price. A downward revision in the cane price or a change in the methodology for fixation of the SAP would no doubt bring material benefits to mills in the State. Competitive PricesA continued SAP-based regime for cane procurement has adversely impacted mills in Uttar Pradesh at a time when significant inventory build up and capacity additions in the State, have pushed sugar prices down. A high cane price would also prevent mills from producing by-products such as ethanol at competitive prices at a time when new opportunities on that front are opening up. As of now, mills in the non-SAP States are in a better position to capitalise on this opportunity. Hence, the final word on SAP pricing in Uttar Pradesh is yet to be announced, with the Government being given a 2-3 month window to review this issue. The resolution of this issue, from a medium to long-term perspective, will also hinge on any further legal challenges to this edict. However, this is not the first instance where a Court has challenged an SAP based pricing regime for cane. An earlier verdict to this effect has been overturned in the past. More Stories on : Stocks | Sugar
Article E-Mail :: Comment :: Syndication :: Printer Friendly Page
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | The Hindu ePaper | Business Line | Business Line ePaper | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |
Copyright © 2007, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|