Sugar stocks surges after Cabinet hikes 25pc ethanol prices

New Delhi, Sep 12 (PTI) Sugar stocks gained up to 18 percent Wednesday after the government approved an over 25 percent hike in the price of ethanol produced directly from sugarcane juice for blending in petrol.

Shares of Avadh Sugars & Energy surged 6.47 percent to close at Rs 393.90 on the BSE. During the trading session, the stock had touched an intra-day high of Rs 402.25 and low of Rs 374.

The stock of Dhampur Sugar Mills jumped 9.59 percent to settle at Rs 97.70 and Magadh Sugar & Energy rose 9.61 percent to end at Rs 89.

Similarly, Simbhaoli Sugars, 17.81 percent, Shree Renuka Sugars, 11.30 percent, Ugar Sugar, 5.49 percent, Dwarikesh Sugar Industries, 5.91 percent saw northward movement on BSE.

Meanwhile the 30 share index, Sensex zoomed 305 points or 0.81 percent ending at 37,717.96.

The Cabinet Committee on Economic Affairs raised the procurement price of ethanol derived from 100 percent sugarcane juice to Rs 59.13 per liter from the current rate of Rs 47.13. The move would help sugar mills quickly release arrears of cane farmers, which stands at over Rs 13,000 crore.

According to market experts, gain in the counter of sugar prices is mainly due to the government approval of a hike in the prices of ethanol.

Such increase may result into more sugar production as more mills may start producing ethanol, they added.