Sugar stocks were trading in the red on February 22, as the government announced a hike in the fair and remunerative price (FRP) of sugarcane to Rs 340 a quintal from Rs 315 for the 2024-25 season. Sugar major Balrampur Chini share price today opened downside at Rs 375 apiece on NSE and went on to touch an intraday low of Rs 372 within a few minutes of the opening bell, logging nearly 2.50 per cent dip on Thursday session.
Shree Renuka Sugars’ share price opened at Rs 50 apiece and went on to touch an intraday low of Rs 47.85 per share level, recording around a 3 percent dip against its Wednesday close of Rs 49.60 per share.
Shares of Dwarikesh Sugar, Rana Sugars, Dalmia Bharat, Triveni Engineering and Industries, KCP Sugar and Industries Corporation, Mawana Sugars, etc. also came under the sell-off heat during Thursday morning deals and slipped into the red territory by over 1 percent intraday loss.
Simbhaoli Sugars Ltd.(down 5.59 per cent), Vishwaraj Sugar Industries Ltd.(down 4.18 per cent), Bajaj Hindusthan Sugar Ltd.(down 3.13 per cent), Rana Sugars Ltd.(down 3.06 per cent), KM Sugar Mills Ltd.(down 2.89 per cent), Mawana Sugars Ltd.(down 2.83 per cent), Sakthi Sugars Ltd.(down 2.45 per cent), Uttam Sugar Mills Ltd.(down 2.37 per cent), Ugar Sugar Works Ltd.(down 2.23 per cent) and KCP Sugar & Industries Corporation Ltd.(down 2.04 per cent) were among the top losers.
DCM Shriram Industries Ltd.(up 1.87 per cent) and Magadh Sugar & Energy Ltd.(up 0.50 per cent) were among the only gainers.
“With this approval, sugar mills will pay FRP of sugarcane at Rs 340/quintal at recovery of 10.25 per cent. With each increase of recovery by 0.1 percent, farmers will get additional price of Rs 3.32 while the same amount will be deducted on reduction of recovery by 0.1 per cent,” the Centre said in a statement.
While for other crops the government fixes the MSP, cane growers are offered FRP. The mechanism is governed by the Sugarcane (Control) Order of 1966. The Commission of Agricultural Costs and Prices (CACP) annually formulates recommendations for FRP, encompassing various agricultural commodities, including sugarcane. The government evaluates these recommendations before they are put in place.
The overall sugar production in 2023-24 is expected to see a downslide because of lower rainfall, which has led to lesser sugarcane plantation this year, said the industry.
At 107 per cent higher than A2+FL cost of sugarcane, the new FRP will ensure prosperity of sugarcane farmers. It is noteworthy that India is already paying the highest price of sugarcane in the world and despite that Government is ensuring the world’s cheapest sugar to domestic consumers of Bharat. This decision of Central Government is going to benefit more than 5 crore sugarcane farmers (including family members) and lakhs of other persons involved in sugar sector. It re-confirms fulfilment of Modi ki Guarantee to double farmers’ income.
With this approval, sugar mills will pay FRP of sugarcane at Rs 340/quintal at recovery of 10.25 per cent. With each increase of recovery by 0.1 per cent, farmers will get additional price of Rs 3.32 while the same amount will be deducted on reduction of recovery by 0.1 per cent. However, Rs 315.10/quintal is the minimum price of sugarcane which is at recovery of 9.5 per cent. Even if sugar recovery is lesser, farmers are assured of FRP at Rs 315.10/quintal.
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