Sugar firms' shares surge on hopes of govt aid

yahoo.com

 

Reuters Market Eye - Shares in sugar companies surge after Prime Minister Manmohan Singh set up a committee on Tuesday under the chairmanship of agriculture minister to look into how to give help to struggling sugar mills.

Prithviraj Chavan, chief minister of Maharashtra, the biggest sugar producing state, announced the creation of the committee to reporters late on Tuesday, adding it would issue a report in a week.
Traders are speculating help could include higher import duties or interest rate-free loans.
Indian sugar mills are struggling as the price of the commodity fell below the cost of production due to surplus production in three straight years.
A hike in cane prices mandated by the central and state governments - intended to support farmers facing higher fertiliser and diesel prices - added to the woes at mills as it made the Indian sweetener uncompetitive in the world market. Bajaj Hindusthan Ltd (NSI:BAJAJHIND.NS - News) rises 2.1 percent, Shree Renuka Sugars Ltd (SRES.NS) is up 1.2 percent and Balrampur Chini Mills Ltd (NSI:BALRAMCHIN) is down 1.1 percent after gaining as much as 3.8 percent.
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