Sugar stocks rose as much as 20 per cent after the Cabinet approved partial decontrol of the sugar sector. Smaller sugar firms such as KM Sugar and Oudh Sugar Mills soared 20 per cent in early trade.
Big sugar firms such as Bajaj Hindusthan surged 13 per cent, while Balrampur Chini gained 11 per cent. Shree Renuka Sugars rose 10 per cent, while EID Parry - the biggest listed sugar firm - traded 7 per cent higher.
Mill owners will not have to sell sugar to the government at a discount. Also, the government will not limit the amount they can sell in the open market. India, the biggest consumer of sugar in the world, is the world's second-biggest producer.
Until now, the government has decided the quantity of sugar mills can sell in the open market and has bought 10 percent of their output at a big discount. (Read: Government's move to clip sugar output swings)
The restrictions were in place partly to keep a lid on local prices and maintain cheap supplies. Analysts have said the tight regulations have caused sharp swings in output, which have led to large-scale imports and exports every few years. India's frequent imports and exports can trigger volatility in global prices.
While the government's move is being cheered by investors, linking cane prices to sugar prices has not happened, analysts said. India has turned into a net importer of sugar for the first time in two years, despite surplus stocks at home, as global prices have slumped. Millers have demanded an increase in the import tax to curb cheaper imports.
Deregulation of the world's biggest sugar market is likely to end a boom-and-bust cycle in plantings, although in the long term farmers may seek to increase revenue by increasing output, analysts said.
(With inputs from Reuters)
Sugar stocks rose as much as 20 per cent after the Cabinet approved partial decontrol of the sugar sector. Smaller sugar firms such as KM Sugar and Oudh Sugar Mills soared 20 per cent in early trade.
Big sugar firms such as Bajaj Hindusthan surged 13 per cent, while Balrampur Chini gained 11 per cent. Shree Renuka Sugars rose 10 per cent, while EID Parry - the biggest listed sugar firm - traded 7 per cent higher.
Mill owners will not have to sell sugar to the government at a discount. Also, the government will not limit the amount they can sell in the open market. India, the biggest consumer of sugar in the world, is the world's second-biggest producer.
Until now, the government has decided the quantity of sugar mills can sell in the open market and has bought 10 percent of their output at a big discount. (Read: Government's move to clip sugar output swings)
The restrictions were in place partly to keep a lid on local prices and maintain cheap supplies. Analysts have said the tight regulations have caused sharp swings in output, which have led to large-scale imports and exports every few years. India's frequent imports and exports can trigger volatility in global prices.
While the government's move is being cheered by investors, linking cane prices to sugar prices has not happened, analysts said. India has turned into a net importer of sugar for the first time in two years, despite surplus stocks at home, as global prices have slumped. Millers have demanded an increase in the import tax to curb cheaper imports.
Deregulation of the world's biggest sugar market is likely to end a boom-and-bust cycle in plantings, although in the long term farmers may seek to increase revenue by increasing output, analysts said.
(With inputs from Reuters)
Sugar stocks rose as much as 20 per cent after the Cabinet approved partial decontrol of the sugar sector. Smaller sugar firms such as KM Sugar and Oudh Sugar Mills soared 20 per cent in early trade.
Big sugar firms such as Bajaj Hindusthan surged 13 per cent, while Balrampur Chini gained 11 per cent. Shree Renuka Sugars rose 10 per cent, while EID Parry - the biggest listed sugar firm - traded 7 per cent higher.
Mill owners will not have to sell sugar to the government at a discount. Also, the government will not limit the amount they can sell in the open market. India, the biggest consumer of sugar in the world, is the world's second-biggest producer.
Until now, the government has decided the quantity of sugar mills can sell in the open market and has bought 10 percent of their output at a big discount. (Read: Government's move to clip sugar output swings)
The restrictions were in place partly to keep a lid on local prices and maintain cheap supplies. Analysts have said the tight regulations have caused sharp swings in output, which have led to large-scale imports and exports every few years. India's frequent imports and exports can trigger volatility in global prices.
While the government's move is being cheered by investors, linking cane prices to sugar prices has not happened, analysts said. India has turned into a net importer of sugar for the first time in two years, despite surplus stocks at home, as global prices have slumped. Millers have demanded an increase in the import tax to curb cheaper imports.
Deregulation of the world's biggest sugar market is likely to end a boom-and-bust cycle in plantings, although in the long term farmers may seek to increase revenue by increasing output, analysts said.
(With inputs from Reuters)
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