Support price to squeeze sugar stocks

Stocks of Uttar Pradesh-based sugar firms such as Balrampur Chini, Bajaj Hindusthan and Dwarikesh Sugar will come under pressure the week. This is because the State Government has increased State advised price (SAP) for sugarcane procurement to Rs 275-290 a quintal for 2012-13. SAP is the price below which mills cannot buy cane from farmers. The UP Government has fixed Rs 290 a quintal for early variety crop, Rs 280 per quintal for normal crop, while Rs 275 a quintal for sub-standard cane, an official release said. Add to this, sugar prices have already been dropped significantly in recent times. All these will put pressure on the sugar stocks in the near-term.