Sugar stocks extend gain; Dhampur, Mawana Sugars hit 52-week highs

Shares of sugar companies continue trading higher for the second straight day, gaining by up to 18% on BSE. Thiru Arooran Sugars, Dhampur Sugars, Uttam Sugar Mills, DCM Shriram Industries, Oudh Sugar Mills, Dwarikesh Sugar and Rajshree Sugars were trading higher in the range of 3% to 8% on the BSE. At 10:19 am, the S&P BSE Sensex was up 0.64% at 29,016 points. Dhampur Sugar Mills (7% at Rs 222) and Mawana Sugars (5% at Rs 84.50) have hit their respective 52-week highs on the BSE in intra-day trade. Indian Sugar Mills Association (ISMA) in its latest press release estimated that the production of sugar is down by 18.5% to 16.25 million tonnes (mt) during Oct-Feb period, compared to 19.94 mt produced a year ago. Commodity Trading Tips



Earlier ISMA has estimated production at 21.3 mt for the current season that started in October, against 25.1 mt last year.An opening stock of 7.6 mt will result in the overall sugar availability of about 29 mt, which may meet the domestic demand of around 25 mt. Thus the carryover stocks will be in tight range of 4 mt when the new season crushing commences in November. Due to tight carryover stocks, country may need to import sugar, later in the season to fulfill domestic stocks of around 6.4 mt for 3 months (Oct- Dec) to meet demand until cane crushing gathers pace by December. Nifty Trading Tips

“There is fear that the government may take immediate policy action to scrap the import duty to control prices if they rise beyond certain levels. Currently, import of raw and white sugar currently attracts 40% customs duty. The sugar mill in the country is not keen in the idea if allowing sugar imports. Thus, they are keeping adequate supplies in the physical market so keep the prices under control,” said Ritesh Kumar Sahu, Fundamental Analyst, Agri Commodities, Angel Broking. As per government sources, it may allow duty-free import of sugar up to 1 million ton in current season under open general license if the wholesale price rise above Rs 4,100 a quintal. Future & Option Trading Tips