Sugar stocks broadly rise after govt nods fair and remunerative price of sugarcane; Shree Renuka, Bajaj Hindustan jump 4.5-5%

The Cabinet highlighted that the decision will benefit the 5 crore sugarcane farmers (GannaKisan) and their dependents.

Aug 26, 2021 12:08 IST India Infoline News Service

Sugar stocks were in focus on Thursday after the Union Cabinet approved Fair and Remunerative Price (FRP) of sugarcane for sugar season 2021-22 (October - September). In broader terms, sugar stocks were trading higher.

At around 12.08 pm, Balrampur Chini, Dhampur Sugar and Triveni Engineering surged around 1% each, while Shree Renuka Sugars climbed nearly 5%.  

Dalmia Bharat Sugar and Industries soared 2% each. Bannari Amman Sugars surged 1.4% and Bajaj Hindusthan Sugar zoomed over 4.5%.

On Wednesday, the Cabinet Committee on Economic Affairs approved Fair and Remunerative Price (FRP) of sugarcane for sugar season 2021-22 (October - September) at Rs. 290/- per quintal for a basic recovery rate of 10%, providing a premium of Rs. 2.90/qtl for each 0.1% increase in recovery over and above 10%, & reduction in FRP by Rs. 2.90/qtl for every 0.1% decrease in recovery.

The Government’s proactive approach to protecting the interest of farmers is also seen in the decision of no deduction in the case of sugar mills where recovery is below 9.5%. Such farmers will get Rs. 275.50 per quintal for sugarcane in ensuing sugar season 2021-22 in place of Rs. 270.75/qtl in current sugar season 2020-21.

The cost of production of sugarcane for the sugar season 2021-22 is Rs. 155 per quintal. This FRP of Rs. 290 per quintal at a recovery rate of 10% is higher by 87.1% over production cost, thereby giving the farmers a return of much more than 50% over their cost.

The Cabinet highlighted that the decision will benefit the 5 crore sugarcane farmers (GannaKisan) and their dependents, as well as the 5 lakh workers employed in the sugar mills and related ancillary activities

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