Sugar Stocks Drop 3% After FRP Hike

New Delhi, Feb 22 (PTI) Shares of Sugar companies settled 3 per cent lower on Thursday after the government announced a hike in the minimum price that mills have to pay to sugarcane growers for the 2024-25 season starting October.

The scrip of Rana Sugars declined 2.86 per cent to close at Rs 25.44 apiece on the BSE, Mawana Sugars at Rs 102.07, Shree Renuka Sugars at Rs 48.96, Dalmia Bharat Sugar and Industries at Rs 402, EID Parry (India) at Rs 630.60.

Also, Triveni Engineering & Industries went lower by 0.73 per cent to settle at Rs 347.90 apiece, Dhampur Sugar Mills at Rs 248.95 and KCP Sugar & Industries Corp at Rs 41.75 per piece on the exchange.

On the other hand, shares of Rajshree Sugars & Chemicals rallied 8.22 per cent to end at Rs 80.60 apiece, and Balrampur Chini Mills gained 0.45 per cent to finish at Rs 382.45 each on the BSE.

The 30-share BSE Sensex index jumped 535.15 points or 0.74 per cent to close at 73,158.24.

On Wednesday, the government announced a hike in the Fair and Remunerative Price (FRP), the minimum rate that mills need to pay to sugarcane growers. The FRP has been increased by Rs 25 to Rs 340 per quintal for the 2024-25 season starting October.

The decision to increase the FRP was taken at the meeting of the Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister Narendra Modi.

This is the highest FRP for sugarcane announced by the Prime Minister Narendra Modi-led government since coming to power in 2014. This is the second time that the Modi government has increased the FRP by Rs 25 per quintal in one go.

"This decision of the central government is going to benefit more than 5 crore sugarcane farmers (including family members) and lakhs of other persons involved in the sugar sector," an official statement said on Wednesday.