CHENNAI, April 11: Sugar scrips have suddenly turned sweet. In the last two days, the market witnessed good buying in this sector with most scrips hitting circuit breakers. The low pricing of most of the scrips resulted in a price freeze and this in turn saw a drop in the number of transactions.Thiru Arooran Sugars has gained almost 10 per cent in two trading days on the National Stock Exchange (NSE) though the volume of trading during the period was only 2,600 shares. BA Sugars moved up from Rs 44.50 levels to Rs 54 levels and had only buyers for 4,400 shares at that level. Sakthi Sugars moved up by 15 per cent and had only buyers for 31,100 shares. Aruna Sugars, which moved to Rs 7.65 from Rs 5.90, had buyers for 10,000 shares at that level but no sellers.
Kothari Sugars saw a good trading volume of 65,000 shares in the last two days with the buying interest showing no signs of abating. KCP Sugar was locked at Rs 44 levels after it moved up from Rs 36.75. Dhampur and Balarampur Chini Sugar Mills alsosaw good trading volumes with the former still reporting good buy positions.
Marketmen opined that the bulk of the buying came from investors, at the same time maintained that there was front-running in select scrips. Brokers, on seeing good buying interest from investors, jumped on to the bandwagon and started taking positions. Reports about a 10 per cent duty on sugar imports and the decision of the BJP government to overcome the shortage in levy sugar by buying from the domestic market (rather than importing) are said to the reasons for the interest in sugar scrips. But the industry is not likely to benefit in a great way from these measures, analysts said.
A 10 per cent duty on imports would only ensure that there is no downside as far as the sugar prices are concerned. It would not translate into big profits. The sugar prices did not move up as there has always been a psychological threat of imports. Though in terms of volume nothing much has fructified, more so after the depreciation of rupee. Butwith sufficient available stock, any sharp increase can be smothered by the government by releasing additional quota. That too at a time when the industry is projecting a possible bumper crop of about 150 lakh tonnes for the 1998-99 season. True to this, the wholesale prices in all the regions have not shown any significant uptrend after the estimate report.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
