The government may increase the minimum selling price of sugar by up to Rs 2 per kg to help millers clear cane dues, media reports suggest
Shares of sugar companies rallied by up 20 per cent on the BSE on Friday on the back of multiple positive news, including expectation of revival in sales, and hike in minimum selling price (MSP).
Dalmia Bharat Sugar and Industries, Dhampur Sugar Mills and Balrampur Chini Mills surged between 15 per cent and 20 per cent in the intra-day trade, while Avadh Sugar & Energy and Dwarikesh Sugar Industries were locked in the upper circuit of 10 per cent on the BSE.
With malls and restaurants being allowed to re-open from June 8, sugar demand is expected to rise. Therefore, along with the summer demand, it is expected that mills may be able to sell the entire June quota, said a Business Standard report
According to The Economics Times report, the government may increase the minimum selling price of sugar by up to Rs 2 per kg to help millers clear cane dues that have crossed Rs 22,000 crore. Last year, the government had increased the price at which mills sell sugar to bulk buyers by Rs 2 a kg to Rs 31 a kg, the report said.
Meanwhile, a PTI report suggests that the government has permitted additional export of 3,569 tonnes of raw and refined sugar under the tariff-rate quota (TRQ) to the US. TRQ is a quota for a volume of exports that enter the US at relatively low tariffs. After the quota is reached, a higher tariff applies to additional imports.