Agriculture Current Affair 13 October 2021

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India considers $3.8 billion increase in fertilizer subsidy

India is likely to provide additional Rs 28,600 crore ($3.8 billion) to fertilizer companies as compensation for selling products at lower than market prices to farmers, people with the knowledge of the matter said.

A cabinet meeting chaired by Prime Minister Narendra Modi may approve the enhanced subsidy for winter-sown crops as early as this week, the people said, asking not to be identified as the matter is not public. The fixed subsidy on of Di-ammonium Phosphate is being raised to Rs 1,650 per bag from Rs 1,200 now.

There will be no price change for farmers, the people said, as the move follows a government directive to companies asking them not to increase retail price of some fertilizers. A finance ministry spokesperson was not available for a comment.

Sugar companies’ revenue to grow by 5%-7% in FY2022: ICRA

Rating agency ICRA NSE 0.26 % expects the revenues of its sample of sugar companies to grow by 5%-7% in FY2022 on a year-on-year basis supported by firmed up domestic and international sugar prices given the improved demand-supply dynamics in addition to expected healthy sugar export and ethanol volumes. Notwithstanding the likely increase in cane prices, the operating margins too may remain steady at 12.5%-13.0% in FY2022 (similar to FY2021 levels) aided by current favourable pricing and revenue mix trends.

Giving more insights, Sabyasachi Majumdar, Senior Vice President & Group Head, ICRA said, “Increased sucrose diversion towards ethanol in light of Government’s complimenting policies is likely to result in ramp up of ethanol supplies while limiting the sugar production. This coupled with healthy sugar export prospects for the current fiscal would aid moderation in inventory position and thus, lower borrowing levels of ICRA sample at the fiscal’s end notwithstanding ongoing debt funded capex plans (for distillery and crushing capacities) for various players. With improved operating profits and reduced debt levels, the coverage metrics and capital structure would emerge stronger by the end of the fiscal year.”

Sugar companies likely to witness 5-7 pc revenue growth in FY’22: Report

Sugar companies’ revenue is likely to grow by 5-7 per cent in 2021-22, following firm domestic and global prices and expected growth in both sugar exports and ethanol volumes, according to a report. On the back of favourable pricing environments domestically and globally as well as increased share of ethanol in revenue mix, the revenues of a sample of sugar companies are expected to grow by 5-7 per cent in FY22 on a year-on-year basis, ICRA NSE 0.26 % said in a report.

“Increased sucrose diversion towards ethanol in light of government’s complimenting policies is likely to result in ramp up of ethanol supplies while limiting the sugar production. This coupled with healthy sugar export prospects for the current fiscal would aid moderation in inventory position and thus, lower borrowing levels at the fiscal’s end notwithstanding ongoing debt funded capex plans (for distillery and crushing capacities) for various players,” Icra Senior Vice President and Group Head Sabyasachi Majumdar said.


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