Updated February 22nd, 2024 at 14:40 IST

Sugar stocks slide as government approves a price hike for sugarcane

The fair and remunerative price, which is the minimum price that sugar mills must pay farmers, has been set at Rs 340 per quintal for the sugar season.

Reported by: Business Desk
Sugar | Image:Freepik
Advertisement

Sugar stocks slide: Sugar stocks, including Shree Renuka Sugars, Balrampur Chini, EID Parry, Magadh Sugar, Mawana Sugars, Avadh Sugar, Rajshree Sugars, DCM Shriram, and Bannari Aman, were in the spotlight on Thursday, February 22, as the Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, approved an increase in the fair and remunerative price (FRP) of sugarcane.

The fair and remunerative price, which is the minimum price that sugar mills must pay farmers, has been set at Rs 340 per quintal for the sugar season 2024–25, with a sugar recovery rate of 10.25 per cent. This marks an 8 per cent increase from the current season's FRP.

Advertisement

Stocks a hit 

Following the announcement, sugar company stocks took a hit in morning trade on Thursday. Rana Sugars dropped 3.21 per cent to Rs 25.35, Mawana Sugars slumped 2.81 per cent to Rs 101.70, and Rajshree Sugars & Chemicals fell 2.50 per cent to Rs 72.62. Shree Renuka Sugars declined 2.41 per cent to Rs 48.50, KCP Sugar & Industries fell 2.20 per cent to Rs 40.87, and EID Parry slipped 1.57 per cent to Rs 629.20 on the BSE.

Advertisement

Similarly, Dalmia Bharat Sugar and Industries dropped 1.15 per cent to Rs 403.15, Balrampur Chinni Mills fell 1.12 per cent to Rs 376.50, Dhampur Sugar Mills was down 0.96 per cent to Rs 248, and Triveni Engineering and Industries slipped 0.76 per cent to Rs 347.80 on the bourse.

The revised FRP will come into effect on October 1, 2024, and for every 0.1 per cent increase in recovery, farmers will receive an additional Rs 3.32, while the same amount will be deducted for a reduction in recovery by 0.1 per cent, according to a statement from the Centre.

Advertisement

(with PTI inputs)

Advertisement

Published February 22nd, 2024 at 14:40 IST