Will SAP decision benefit sugar stocks?

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Will SAP decision benefit sugar stocks?

There has been a very good run in sugar over the last couple of days. According to the legal sources, the Allahabad High Court might actually direct the UP government to actually bring down the SAP (state advice price).

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There has been a very good run in sugar over the last couple of days. According to the legal sources, the Allahabad High Court might actually direct the UP government to actually bring down the SAP (state advice price).  Few days ago, an announcement came that the UP government has actually maintained the SAP at Rs 125 per quintal, which is a bit of disturbing news for the sugar industry as a whole.

Sources inform that the Allahabad High Court in favour of the mills have actually stayed the proceedings of recovery in one particular case. But the final hearing for the case on this SAP and the proceeding recovery is actually slated for the week commencing 12^th November.

This is probably one of the reasons why the stocks have been moving up. Bajaj Hindustan and Balrampur Chini in the last four trading sessions have actually moved up 18% and 13% respectively. In anticipation of the SAP being cut down, sugar stocks like Bajaj Hindustan and Balrampur have moved up. Even when the cabinet approved the relief package for the sugar industry, stocks like Balrampur, Bajaj Hindustan and Shree Renuka Sugars moved up 10%, 15% and 16% respectively.