There is an upward movement in sugar stocks on Thursday due to reports indicating that the government is considering an increase in the minimum sale price (MSP) for the upcoming 2024-25 sugar season. It’s interesting to note that sugar stocks have experienced a significant bull run over the past month. With prices rising by an impressive 10% to 20%. It’s definitely an exciting time for investors and stakeholders in this sector.
Shree Renuka Sugars has surged by over 5%, Ugar Sugar Works by over 3.5%. Avadh Sugar & Energy increased by 2.6%, while Rana Sugars rose by 4%. Similarly. KM Sugar Mills and Balrampur Chini Mills saw gains of 3.0% and 3.2% respectively. Dhampur Sugar Mills leads with a rise of 5.2%, followed by Simbhaoli Sugars at 3.5%. Magadh Sugar & Energy is up by 2.5%. while Triveni Engineering and Industries and Andhra Sugars saw increases of 2.2% and 2.5%, making them notable for Thursday’s session.
As per a report from Informist, the government is contemplating an increase in the minimum selling price of sugar for the new coming season starting in October. Since 2019, the minimum selling price of sugar has remained steady at ₹31 per kg. The industry has been advocating for a raise in the minimum selling price to the range of ₹40-41 per kg.
Deepak Ballani of the All India Sugar & Bio-energy Manufacturers Association stresses the need for a proportional increase in the minimum selling price of sugar in line with any hike in the Fair and Remunerative Price (FRP) of sugarcane, as reported by Informist.
The Cabinet Committee on Economic Affairs has given its nod to a significant 7.4% increase or Rs 25. All in the Fair and Remunerative Price (FRP) of sugarcane for the 2024-25 sugar season from October to September. The revised FRP now stands at ₹340 per 100 kg, with a baseline recovery rate stands at 10.25%.
According to the most recent sugar sector analysis by Brokerage Centrum- Uttar Pradesh saw a significant reduction of 10% year-on-year in crushing activities for the 2023-24 sugar season. The reason is reduced yields resulting from red rot disease. Meanwhile, sugar production in Maharashtra surged to 11.0 MMT from 10.5 MMT. Nationally, the sugar recovery data for the same period showed a year-on-year improvement of 10.09%. It was consistent with the previous month, largely due to reduced diversion.
