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₹12.85 0.6  4.9%

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Sector
Consumer Defensives
Size
Micro Cap
Market Cap £4.89m
Enterprise Value £13.3m
Revenue £135.1m
Position in Universe 2099th / 3109

India considers ending sugar export duty to lift prices - minister

Fri 9th February, 2018 10:37am
By Mayank Bhardwaj 
    NEW DELHI, Feb 9 (Reuters) - India is considering scrapping 
the 20 percent export duty on sugar, the country's food minister 
said on Friday, as the government tries various ways to lift 
prices of the sweetener amid expectations of a surge in 
production this marketing year. 
    India, the world's second-biggest sugar producer, this month 
doubled the sugar import tax and imposed a cap on the amount 
mills can sell in February and March, moves aimed at arresting a 
steep fall in prices that have hurt companies' ability to pay 
sugarcane farmers.  urn:newsml:reuters.com:*:nL4N1PY5SK  urn:newsml:reuters.com:*:nL4N1PV42X 
    Sugar prices  SUG-ARMKHP-NCX  have fallen around 16 percent 
in the local market since the 2017/18 marketing year started on 
Oct. 1, making it difficult for mills to pay farmers an 11 
percent government-mandated hike in cane prices. 
    "We're heading towards a reasonably big surplus and we 
recently doubled the import duty on sugar to 100 percent," Ram 
Vilas Paswan, the minister for food and consumer affairs, told 
reporters. "There are various demands from the industry, 
including scrapping the export duty. We're considering it." 
    Paswan said the government expects sugar production to jump 
to 24.9 million tonnes in the ongoing 2017/18 marketing year, 
which would be 23 percent higher than the 20.2 million tonnes in 
2016/17. 
    The Indian Sugar Mills Association (ISMA), whose production 
estimates typically differ from the government's, has projected 
output of 26.1 million tonnes this season. 
    Local consumption is expected to be around 25 million 
tonnes, which means around 1 million tonnes can be exported, 
according to the ISMA. That could further weigh on international 
prices  SBc1 , which have fallen about 8 percent in the past 
three months.  urn:newsml:reuters.com:*:nL8N1PW0JH 
    The jump in production and the resulting fall in prices have 
also forced states such as Maharashtra, India's second-biggest 
sugar producer, to consider directly buying big chunks of its 
output.  urn:newsml:reuters.com:*:nL4N1PW3V2 
    The moves could help prop up shares of companies such as 
Shree Renuka Sugars  SRES.NS , Balrampur Chini Mills Ltd 
 BACH.NS , Dwarikesh Sugar Industries  DWAR.NS  and Simbhaoli 
Sugars  SIMB.NS . 
    Sugar production swings wildly in India, where half of the 
country's farmland depends on the June to September monsoon 
rains for water because of a lack of irrigation. Sugar cane is 
very water-intensive. 
 
 (Writing by Krishna N. Das; Editing by Christian Schmollinger) 
 ((Krishna.Das@tr.com; +91-98711-18314,  +91 11 4954 8026; 
Reuters Messaging: Krishna.Das.thomsonreuters.com@reuters.net, 
Twitter: https://twitter.com/krishnadas56)) 
 
Keywords: INDIA SUGAR/TAX
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