Sugar manufacturers gain on export news
17 Dec 2010
Sugar spot prices jumped by Rs30 to Rs50 on Thursday, a day after the government allowed export of 5,00,000 tonnes of sugar under the open general licence (OGL).
Union agriculture minister Sharad Pawar yesterday told a meeting in Pune that the centre would issue directives on export of five lakh tonnes of excess sugar this week.
"The government took the decision permitting export of five lakh tonnes of sugar yesterday and a notification to that effect will be issued this week", he said.
The government also increased the levy sugar price (the price at which government purchases sugar from mills for meeting its PDS obligations) by 5.09 per cent to Rs1,847.05 per quintal from last year's Rs1,757.50 per quintal.
Pawar also hinted at the possibility of government further increasing the export quota, taking into account the prevailing international prices of sugar.
At current international prices, Indian sugar is expected to fetch around Rs3,100-3,200 (fob) per quintal, against the ex-factory domestic prices of around Rs2,800 per quintal.
Prices of M-grade sugar in Delhi rose to around Rs3,025 per quintal on Thursday from Rs2,990 per quintal the previous day, while the S-grade sugar in Vashi was quoted at around Rs2,950.65 per quintal, up Rs45 from Wednesday.
Shares of major sugar companies also gained. Bajaj Hindustan Ltd, the country's biggest sugar producer, closed at Rs110.45, gaining 2.3 per cent while Balrampur, the second biggest, rose to Rs79.75, gaining 2.4 per cent. Shree Renuka Sugars Ltd jumped 5 per cent to Rs89.7.
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