* Shares in Uttar Pradesh-based sugar companies were trading
lower after the state raised the price at which sugar mills buy
the new season crop by up to 16 per cent to 290 rupees per 100
* Morgan Stanley said in a note the hike in the price of cane in
the current sugar season by 2,920 rupees per tonne is much
higher than expectations of a 2,820 rupees per tonne hike.
* "Profitability of north Indian millers is likely to be
dented," it added.
* The hike in procurement price will increase the cost of
production, which, at around 35,000 rupees per tonne, is
comparable to the current spot sugar prices, implying "no
profits for the sugar division at the operating level," Morgan
* Shares of Balrampur Chini fell 5 percent and Bajaj
Hindusthan was down 1.25 percent, while Shree Renuka
Sugars fell 2.1 percent.