Triveni Engineering gains on the Rising Sugar Prices

Sugar stocks are mostly higher amid rising sugar prices ahead of peak crushing season. The fair and remunerative pricing policy that privileged sugarcane and sugar production resulted in sugarcane prices increasing by almost Rs 100 per quintal to Rs 230 in the last five years. Sugar production estimate by Indian Sugar Mills Association declined to 25 million tons in 2015-16, from 28 million tons a year earlier. According to Indian Sugar Mills Association's estimates, sugar production will be about 234 lakh tons in the 2016-17 season that began in October. That will be 7% down from the previous year.

Along with the Sugar Sector rising Triveni Engineering share price also rallied over 6 per cent in trade today.

Raw Sugar futures slipped under 18 cents per pound last week before bouncing back above that levels this week. The sugar prices are being helped by concerns of a global production deficit. This rebound has also restricted the losses for local sugar prices, which took a hit after the Demonetization drive. Medium Grade Sugar in Muzaffarnagar declined from Rs 3780 per quintal to Rs 3630 per quintal in six week after the government banned high values notes on 8 November 2016. However, prices are up near Rs 3700 per quintal now. The commodity is up about 15% this year.

Meanwhile, Triveni Engineering share price was trading at Rs. 56.75, up by 5.58 per cent as the market inched closer to its close at 3:30 PM.

According to the Indian Sugar Mills Association (ISMA), as on 15 December 2016, 440 sugar mills were crushing sugarcane for the year 2016-2017 Sugar Season, and they have produced 53.29 lakh tons of sugar till that date, i.e. 5.36 lakh tons, or 11%, higher than the sugar production on the corresponding date of previous sugar season, when same number of sugar mills were in operation and had produced 47.93 lakh tons of sugar. This has been the sweet spot for the Sugar Sector as a whole.