Market

Sugar stocks rise over 5% after Cabinet approves subsidy on sugar exports

Updated : August 29, 2019 12:25 PM IST

Shares of sugar firms advanced on Thursday after the Cabinet approved a subsidy worth Rs 6,268 crore to sugar exports in order to support struggling sugar mills and farmers.

Stocks like Shree Renuka Sugars, Bannari Amman Sugars, Bajaj Hindusthan Sugars and Mawana Sugar jumped more than 5 percent.

Shares of sugar firms advanced on Thursday after the Cabinet approved a subsidy worth Rs 6,268 crore to sugar exports in order to support struggling sugar mills and farmers. Shares of Shree Renuka Sugars rose 6.66 percent and Bannari Amman Sugars was up 5.98 percent. Bajaj Hindusthan Sugars and Mawana Sugar jumped 4.58 percent and 4.73 percent, respectively.

The Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved the export subsidy for the 2019-20 sugar season (October-September) to export 60 lakh metric tonne (MT) of sugar. The subsidy would be directly credited to the farmer's account on behalf of the mills against cane price dues.

This is the second such boost for the industry in less than a year after the Cabinet increased the minimum support price (MSP) ahead of the Lok Sabha polls. In February, the government announced Rs 2 per kg increase in MSP of sugar to Rs 31 per kg.

Earlier this year, Reuters reported that India will maintain its sugar export subsidies despite complaints to the World Trade Organization (WTO).

The WTO set up panels to rule on complaints by rival producers Australia, Brazil and Guatemala against India’s export subsidies for sugar and sugarcane producers which they assert are illegal.

Catch all the latest and live updates here on CNBC TV18 Market Live Blog.

Disclaimer: CNBCTV18.com advises users to check with certified experts before taking any investment decisions.