Scrips related to sugar manufacturers are trading with a gain on the Bombay Stock Exchange.
Most stocks are in the green, but a majority of them have recorded 20% gains since early morning trade began.
Even non-producer stocks related to Sugar trading were reported of trading with at least a 4% gain.
This impact was linked to a decision passed by the Cabinet Committee on Economic Affairs on Wednesday. The committee hiked the price of Ethanol produced directly from sugarcane juice by 25%, thereby helping sugarcane mills as well as farmers.
The procurement price of ethanol derived from 100% sugarcane juice stands at Rs 59.13 per litre from the existing rate of Rs 47.13.
The decision to hike rates of Ethanol used for blending in Petrol will help curbing oil imports and also reduce the issue of over production of sugarcane.
For sugar stocks, this has been a second day of registering handsome gains.
The stocks had started trending on Wednesday in anticipation of a favorable news.
Besides helping sugar stocks, the Cabinet decision is expected to help sugarcane farmers. The move is likely to help sugarcane mills release arrears of cane farmers.
Estimates suggest that arrears to farmers work out to a whopping Rs 13,000 crores. The cabinet decision is expected to result into a release of 40% of such dues in Uttar Pradesh alone.
According to a <i>PTI</i> report, ethanol procured by public sector oil marketing companies (OMCs) has increased from 38 crore litres in the year 2013-14 to approximately 140 crore litres in 2017-18.
Stocks of Bannari Amman Sugars, Magadh Sugar and Energy Ltd, Ponni Sugars, Dhampur Sugar Mills, Uttam Sugar Mills, Andhra Sugars, KM Sugar Mills, Mawana Sugars, Sakthi Sugars, Ugar Sugar Works, and Simbhaoli Sugars were trading with a gain in the range of 15-20%.
On a day, the BSE Sensex recorded a 362.22 point gain in the trading session, the news of sugar mills is certainly a sweet news.