Sugar stocks gained up to 18 per cent Wednesday after the government approved an over 25 per cent hike in the price of ethanol produced directly from sugarcane juice for blending in petrol.
Shares of Avadh Sugars & Energy surged 6.47 per cent 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 per cent to settle at Rs 97.70 and Magadh Sugar & Energy rose 9.61 per cent to end at Rs 89.
Meanwhile the 30 share index, Sensex zoomed 305 points or 0.81 per cent ending at 37,717.96.
The Cabinet Committee on Economic Affairs raised the procurement price of ethanol derived from 100 per cent sugarcane juice to Rs 59.13 per litre 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 hike in the prices of ethanol.
Such increase may result into more sugar production as more mills may start producing ethanol, they added.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)