Sugar stocks gain on export notification

Stocks of sugar companies closed with gains on the Bombay Stock Exchange after the government allowed exports of 5 lakh tonnes of the sweetener.

India's biggest sugar producer Bajaj Hindustan, settled at Rs 69.65, up 4.34 per cent. Simbhaoli Sugars ended at Rs 40.35, up 8.47 per cent on BSE.

Commenting on the uptrend on the sector, Ashika Stock Brokers' Research Head Paras Bothra said, "The entire sugar pack rallied after the Empowered Group of Ministers (EGoM) on food decided to permit the export of five lakh tonnes of sugar."

The rally was evident in other sugar companies as well.

Balrampur Chini Mills settled up 4.27 per cent, Dhampur Sugar Mills (4.80 per cent), Dwarikesh Sugar (5.59 per cent), EID Parry (5.76 per cent), Shree Renuka (8 per cent), Oudh Sugar (15.70 per cent) and Uttam Sugar(1.19 per cent).

India's sugar production is estimated to rise to 24.2 million tonnes in the 2011-12 season (October-September) from around 19 million tonnes in the previous year. The annual demand is pegged at 22-22.5 million tonnes.

According to the industry data, mills have produced around 24 million tonnes of sugar till June 15 of the 2010-12 season.

The rally in sugar stocks was much in tandem with the rise in the broader market, as both the benchmark indices closed in the positive territory today.

The BSE benchmark index Sensex climbed to a two-month high adding over 201 points to 18,693.86.

The broad-based National Stock Exchange index Nifty traded above 5,600 mark level by adding 55.15 points to settle at 5,600.41.