Last update: February 22, 2024 14:14 IST
Sugar stocks were trading in the red on February 22 as the government announced an increase in the Fair Remuneration Price (FRP) of sugarcane from Rs 315 to Rs 340 per quintal for the 2024-25 season. Shares of sugar major Balrampur Chini slumped to Rs 375 per share on the NSE today and touched an intra-day low of Rs 372 within minutes of opening, down nearly 2.50 per cent in Thursday's session.
Shares of Shree Renuka Sugars opened at Rs 50 per share and hit an intra-day low of Rs 47.85 per share, down about 3% from Wednesday's closing price of Rs 49.60 per share.
Stocks of Dwarikesh Sugar, Rana Sugars, Dalmia Bharat, Triveni Engineering and Industries, KCP Sugar and Industries Corporation, Mawana Sugars and others also felt the selling heat in morning trade on Thursday and slipped more than 1% into the red zone during the session. Loss.
Simbhaoli Sugars Ltd. (down 5.59%), Vishwaraj Sugar Industries Ltd. (down 4.18%), Bajaj Hindusthan Sugar Ltd. (down 3.13%), Rana Sugars Ltd. (down 3.06%), KM Sugar Mills Ltd. .(down -2.89%), Mawana Sugars Ltd. (down 2.83%), Sakthi Sugars Ltd. (down 2.45%), Uttam Sugar Mills Ltd. (down 2.37%), Ugar Sugar Works Ltd. (down 2.23%) % ) and KCP Sugar & Industries Corporation Ltd. (down 2.04%) had the biggest declines.
DCM Shriram Industries Ltd. (up 1.87%) and Magadh Sugar & Energy Ltd. (up 0.50%) were the only gainers.
“With this approval, sugar mills will pay Rs 340/quintal for sugarcane FRP at a recovery rate of 10.25%. For every 0.1% increase in recovery rate, farmers will get an additional price of Rs 3.32 and for every 0.1% decrease in recovery rate, the same amount will be deducted,” the Center said in a statement.
While for other crops the government fixes MSP, sugarcane growers are provided with FRP. This mechanism is governed by the Sugarcane (Control) Order, 1966. Every year, the Committee on Agricultural Costs and Prices (CACP) formulates recommendations for FRPs covering a variety of agricultural products, including sugarcane. The government will evaluate these recommendations before implementing them.
The industry expects overall sugar production to decline in 2023-24 due to reduced rainfall, which will lead to fewer sugarcane plantations this year, it said.
The new FRP, which is 107% higher than the A2+FL cost of sugarcane, will ensure prosperity for sugarcane farmers. It is noteworthy that despite India already paying the highest sugarcane prices in the world, the government is ensuring domestic consumers in Bharat the cheapest sugar in the world. This decision by the central government will benefit over five billion sugarcane farmers (including their families) and countless others involved in the sugar sector. This reaffirms the implementation of Modi ki guarantee to double farmers’ income.
With this approval, sugar mills will pay Rs 340/quintal for sugarcane FRP at a recovery rate of 10.25%. For every 0.1% increase in recovery rate, farmers will get an additional price of Rs 3.32 and if recovery rate decreases by 0.1%, the same amount will be deducted. However, Rs 315.10/quintal is the lowest price of sugarcane with a recovery rate of 9.5%. Even if sugar recovery is low, farmers are guaranteed an FRP of Rs 315.10/quintal.
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