Sugar stocks turn sweeter in morning trade on BSE

Led by Bajaj Hindustan, stocks of sugar companies surged in early trade on the BSE today after the government issued permits for the export of 4.21 lakh tonnes of the sweetener, out of the total 5 lakh tonnes that it allowed in August.

Sugar stocks rallied in today's trade, led by the country's biggest producer Bajaj Hindustan, which jumped nearly 2.67% to a high of Rs 38.40 on the BSE. Similarly, Simbhaoli Sugars jumped by 6.70% on the BSE.

Exports of the sweetener were permitted as the country's sugar production in the 2010-11 marketing year (October-September) has exceeded domestic demand after a gap of two years.

Till October 4, export release orders for 4,21,808 tonne have been issued to nearly 450 factories, according to data posted on the Food Ministry's website.

Reacting to the development, Balrampur Chini Mills surged by as much as 3.92%, while Dhampur Sugar Mills jumped 6.78%.

The other sugar companies that participated in the rally included Dwarikesh Sugar (up 3.38%), EID Parry (up 2.17%), Shree Renuka (up 6.52%), Oudh Sugar (up 7.65%) and Uttam Sugar (up 3.40%).

The rally in sugar stocks was in sync with the trend in the broader market, with the BSE trading in positive terrain. The Sensex was trading 467.69 points higher at 16,260.10 at 1110 hours today.

India, the world's second largest producer of sugar after Brazil and the biggest consumer, produced 24.3 million tonne of sugar in the 2010-11 marketing year, as against 18.9 million tonne in the previous year. In the 2008-09 marketing year, sugar production stood at 14.6 million tonne.