Sugar scrips surge on Govt move to hike import duty to 40%

Scrips of sugar companies such as Balrampur Chini Mills and Shree Renuka Sugars soared in the intra-day trade on Monday after the Government decided to increase the import duty on the sweetener to 40 per cent from the current 15 per cent.

The Government also decided to provide an additional interest free loans of about Rs 4,400 crore to the cash-starved sugar mills to make cane payment.

Balrampur Chini Mills was trading 8.36 per cent higher at Rs 86.2 around noon while Shree Renuka Sugars was hovering 10.32 per cent higher at Rs 29.40. Scrips of Bajaj Hindusthan was trading higher 7.45 per cent at Rs 28.5, while DCM Shriram Ltd was trading around 5.64 per cent.

Simbhaoli Sugars was trading 4.96 per cent higher at Rs 22.20 on the BSE.

Also, the Government on Monday decided to extend sugar export subsidy of Rs 3,300 per tonne till September this year, a move that is expected to help sugar mills to ship out the surplus sweetener.

So far, sugar production in the current 2013-14 season ending September is estimated at 23.7 million tonnes, marginally lower than the previous year's output but higher than domestic consumption of 23 million tonnes. Sugar stocks at the end of current 2013-14 season are estimated at 7.5 million tonnes.