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Sugar stocks rally on sweet news from government
Bajaj Hindusthan had touched an intra day high of Rs 56 and an intraday low of Rs 50.30. At 1:39 pm, the share was quoting at Rs 54, up Rs 1.35, or 2.56%. According to agencies, the government says sugar mills can export without prior government nod till December 31, 2008, reports CNBC-TV18.
Bajaj Hindusthan had touched an intra day high of Rs 56 and an intraday low of Rs 50.30. At 1:39 pm, the share was quoting at Rs 54, up Rs 1.35, or 2.56%.
Shree Renuka Sugars has touched an intraday high of Rs 67.50 and an intraday low of Rs 61.25. At 1:36 pm, the share was quoting at Rs 65.30, up Rs 0.80, or 1.24%.
According to agencies, the government says sugar mills can export without prior government nod till December 31, 2008, reports CNBC-TV18.
Sakthi Sugars has touched an intraday high of Rs 45.35 and an intraday low of Rs 45.35. At 1:28 pm, the share was quoting at Rs 45.35, up Rs 2.15, or 4.98%.
Balrampur Chini Mills had touched an intraday high of Rs 49.60 and an intraday low of Rs 44.05. At 1:39 pm, the share was quoting at Rs 47.45, down Rs 0.55, or 1.15%.
UP Sugar Mills Association has moved the Allahabad High Court challenging the decision of the state government to fix the SAP at Rs 140/quintal for this season. SAP announced by the state is 72% higher than the Centre's Statutory Minimum Price (SMP) of Rs 81.18/quintal and 12% higher than the SAP of 125 last year. Sugar mills are resisting the price hike arguing that the crushing of cane would be unviable at such high prices. Case is likely to come for hearing on November 6th.
Sugar companies are filing SAP fixation arbitrary and without any consideration given to the recent losses suffered by the sugar mills. Uttar Pradesh Sugarcane Federation had filed caveat applications in the Supreme Court as well as in the Allahabad HC and its Lucknow Bench to defend the SAP.Mills mulling asking a subsidy of Rs 20-25/quintal for crushing from Mah govt.
Poor supply is keeping prices steady. UP crushing is likely to commence by Nov 15th. NCDEX Sugar M grade Dec contracts opened at Rs 1804 and closed at 1825.
Global supply outlook will tighten into next year due to rain-induced crop problems in Brazil and falling output in India. Expectations are post elections prices will rise to above Rs 2000 levels.
Sugar Mill owners feel that an interim relief order like last year will help them commence activities. Last year the SC ordered an interim cane procurement price of Rs 110/quintal and raised it later to the SAP level of Rs 125 per quintal. Industry sources believe that the Supreme Court may temporarily settle the price at Rs 125/q through an interim order which may be raised later to Rs 140.
Centre has fixed SMP at Rs 81.18; TN govt fixes SAP at Rs 105.
One-month extension has been granted to mills to export without the obligation of a release order ended on October 30. Government is planning to allow mills to export sugar without the requirement of any release order for another few months.
Sugar production is expected to be less than last year's more-than 26-million tonne level, there is a carry-over stock in excess of 11 million tonne and this should take care of all demand. Govt sources says that sugar in the crop year that started in October is expected to fall to around 22 - 23 million tonne
Reports suggest that farmers there have started supplying high-recovery sugarcane to jaggery units given the uncertainty over the commencement of crushing by sugar mills. Generally cane with less than 9% recovery is supplied to jaggery, but now the high recovery sugarcane is also being sold to the jaggery units as the land needs to be vacated for wheat cultivation. Also farmers receive the payment from jaggery producers soon after selling the cane while sugar mills stretch the payment for upto 2 years. Sugar output is expected to fall over 25% this season as a result of the lower coverage.
