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Shree Renuka Sugars cuts trading activities

Weak global sentiment and import duty turning unviable for sugar refining in India with imported raw sugar

Dilip Kumar Jha / Mumbai Nov 03, 2012, 12:08 ISTLeading sugar producer Shree Renuka Sugars Ltd has cut trading activities massively in the last quarter of the sugar year (October 20111 – September 2012) due to, perhaps, weak global sentiment and import duty turning unviable for sugar refining in India with imported raw sugar. From trading activities, the company generated an income of Rs 105.7 crore in the September quarter compared to Rs 416.6 crore in the corresponding quarter of the previous year. The decline was steady with total income from trading reported at Rs 203.9 crore, a company statement said.Similarly, focus was also diverted in co-generation and ethanol sectors which recorded a total business worth Rs 18.4 crore and Rs 72.9 crore for the quarter ended September 2012, compared to Rs 40.7 crore and Rs 108.7 crore in the comparable quarter previous year. In contrast, revenue from sugar was higher at Rs 972.9 crore for the September 2012 quarter compared to Rs 599.4 crore in the same quarter last year, witnessing, thereby, a rise of over 62 per cent. A turnaround in sugar prices yielded positive result on the financial performance of India’s leading sugar refiner Shree Renuka Sugars Ltd which posted Rs 7.7 crore standalone net profit for quarter ended September 30 as against Rs 57.30 crore loss incurred in the corresponding quarter previous year.Sugar price shot up to Rs 3650 a quintal (ex-factor in Uttar Pradesh) early October this year as compared to Rs 2800–2850 a quintal about a year ago. Total standalone income for the company, however, recorded a marginal increase to Rs 1154.4 crore during the quarter ended September this year versus Rs 1127.3 crore in the same period last year. Sugar refiners in India have urged the government to either bring down import duty on raw sugar to “nil” or increase it on refined sugar to 20 per cent from the existing 10 per cent across all types of imports in order to make viable of refining sugar in India from imported raw sugar. A snapshot of India's sugar production (in mn tonne) Particulars 2010-11 2011-12(E) 2012-13(P) Production 24.4 25.9 23.7 Consumption 20.7 21.7 22.7 Exports 2.6 3.0 1.0 Source: Care ratingshttp://www.businessstandard.com/india/news/shree-renuka-sugars-cuts-trading-activities/194265/on