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Stocks of sugar companies such as Balrampur Chini, Bajaj Hindustan and DCM Shriram Industries fell on Monday on concerns over weak outlook. This is even as the BSE benchmark Sensex gained 232 points or 1.47 per cent as positive macro data lifted the market sentiments.
The assembly polls in Uttar Pradesh, the second largest producer of the sweetener, in the middle of the crushing season could dampen the sentiments for sugar producers as they were hoping the Government would approve further exports. Business Line reported on Monday that the code of conduct in the run-up to the UP polls could prompt the Government to delay exports.
Stocks of Balrampur Chini Mills Ltd and DCM Shriram Industries, which have their mills in Uttar Pradesh, fell over 5 per cent in the Monday trade. The Balrampur Chini scrip touched an intraday low of Rs 35.90 before recovering to close at Rs 36.25, a loss of 5.48 per cent over previous close. Balrampur had hit a 52-week low of Rs 32.70 on December 19. The DCM Shriram Industries scrip shed 6.12 per cent to close at Rs 37.60 on the BSE.
Scrips of Bajaj Hindusthan Ltd, Simbhaoli Sugars Ltd, Mawana Sugars, Dhampur Sugar and Triveni Engineering and Industries Ltd, which have mills in Uttar Pradesh ended in negative territory on Monday. Even scrips of other producers such as Shree Renuka Sugars, Shakti Sugars and Bannari Amman Sugars saw declines.
Sugar producers have been seeking approval for further exports to take advantage of the relatively high global prices, which would have helped them with cash flows in the peak crushing season. The Indian producers have a window till March when the Brazilian sugar enters the export market.
Any delay in export approval may put the sugar millers in a spot as cane arrears are expected to start building up from middle of January, by which time their existing credit drawal limits would have been exhausted.
India is witnessing a bumper cane production and output according to ISMA is projected at 26 million tonnes for the 2011-12.
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