The Cabinet Committee on Economic Affairs’ nod to a Rs 6,000 crore interest-free loan package for the beleaguered sugar industry on Wednesday saw sugar stocks soar between 4 and 13 per cent on the BSE.

At around 12:30 pm, shares of industry majors like Bajaj Hindusthan, Mawana Sugars, Shree Renuka Sugars and Rajshree Sugars and Chemicals were up 11.4 per cent, 12.21 per cent, 12.25 per cent and 11.15 per cent, respectively. Triveni Engineering and Industries stock traded up 4.55 per cent while Balrampur Chini Mills stock was up 6.72 per cent.

Nitin Gadkari, Minister for Road Transport and Highways and Shipping said, "The loans will be given to plants who have charted more than 50 per cent of the farmer dues. The money will be put directly in the accounts of the farmers opened under the Jan Dhan Yojana."

He added that this decision will provide a short term relief for the farmers.

The package should help mills clear arrears of around Rs.22,000 crore that is owed to farmers. The Government of Maharashtra, the country’s largest sugar producing State, had earlier announced that it would provide a similar Rs.2,000 crore package.

Prices have remained depressed in the domestic market and the industry has stated that there is likely to be a surplus of 10-10.5 million tonnes (mt) at the beginning of the next season which is likely to only put further pressure on prices. It had asked the Centre to take out around 10 per cent of the surplus to ease pressure.

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