June 5, 2018 / 5:02 AM / 18 days ago

Indian sugar stocks rise on reports government plans bailout for mills

(Reuters) - Shares of Indian sugar companies rose on Tuesday following reports that the federal government would announce a bailout package of over 70 billion rupees ($1.04 billion) for cash-starved sugar mills to help clear dues to farmers.

FILE PHOTO: A labourer stands next to a mechanical harvester in a sugarcane field near the village of Umraj, about 285km (177 miles) south of Mumbai, December 5, 2011. REUTERS/Vivek Prakash/File Photo

Dhampur Sugar Mills Ltd and Mawana Sugars Ltd gained 7 percent each, while Balrampur Chini Mills Ltd and Avadh Sugar & Energy Ltd climbed more than 6 percent each.

Uttam Sugar Mills Ltd, Magadh Sugar & Energy Ltd and Dalmia Bharat Sugar and Industries Ltd rose 4 percent each.

The Cabinet Committee on Economic Affairs is scheduled to meet on Tuesday to decide on the bailout, according to the report.

Reuters reported late last month, citing official sources, that the government would soon approve a plan to create “buffer stocks” of 3 million tonnes of sugar to prune surplus in the domestic market and stem a free fall in prices.

($1 = 67.1225 Indian rupees)

Reporting by Jessica Kuruthukulangara in Bengaluru; Editing by Subhranshu Sahu

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