Sugar prices are likely to go up as the government has decided to hike the import duty on sugar to 40 per cent from the current 15 per cent.
The government will provide additional interest-free loan of Rs. 4,400 cr to cash-starved sugar mills to make payments to cane farmers, while the import duty on sugar will be hiked to 40 per cent from the current 15 per cent, Food and Civil Supplies Minister Ram Vilas Paswan said on Monday.
As per experts, domestic sugar prices may increase by a couple of rupees due to hike in import duty.
Besides, government will extend sugar export subsidy of Rs. 3,300 per tonne till September this year.
The hike in duty is aimed at curbing import of sugar and improving the bearish sentiment in domestic market.
The government has also decided to raise the mandatory blending of ethanol in gasoline to 10 percent from 5 per cent.
Shares of sugar companies showed gains in the stock market after the government announced additional interest-free loan of Rs. 4,400 crore for sugar mills besides hiking its import duty.
Shree Renuka Sugar saw its share price soar by nearly 9 per cent to Rs. 28.90, while Balrampur China gained over 8 percent to Rs. 86.30.
Bajaj Hindusthan rose 8.6 per cent to Rs 29.15, EID Parry by 8 per cent to Rs. 222.2, Dhampur Sugar by over 8 per cent to Rs. 65.80, Dwarikesh Sugar by 5 per cent to Rs 41.55, Rajshree Sugar by 5 per cent to Rs. 32, Sakthi Sugar by 5 per cent to Rs. 24.85 and Simbhaoli Sugar by 5 per cent to Rs. 22.2.