The Uttar Pradesh (UP) government has kept the cane price unchanged at Rs 280 per quintal, which could be net positive for some sugar companies. This price has been constant for the third year now.
The government will give lower subsidy on cane prices for ‘Sugar Year 2016’.
Not changing the cane prices will definitely be a positive for the sugar mills in UP, says SP Tulsian of sptulisan.com.
According to him this should also be seen in the context that many of the sugar mills in UP are already seeing higher recovery by 75-150 basis points. For example, the recovery seen by Triveni Engineering and Balrampur Chini is to the tune of around 12 percent, which earlier used to be around sub-11 percent.
Another competitive advantage is that cane prices in Tamil Nadu are higher around Rs 285 per quintal.
Moreover, in the last eight months the sugar prices in UP have gone by Rs 8 per kg to around Rs 31.50 /kg and so, mills are happy that the prices have been kept unchanged.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
