Shares of sugar manufacturers on Friday ended with a gain of up to 9% on the Bombay Stock Exchange (BSE) after the government partially decontrolled the sector by giving freedom to millers to sell the sweetener in the open market.

While DCM Shriram Industries gained 8.9%,

Bajaj Hindusthan settled 0.7% up and Shree Renuka Sugar rose by 2.4%.

Sugar stocks had surged by up to 16% in early trade.

Among others, Balrampur Chini Mills climbed 3.2%, Triveni Engineering & Industries (1.9%), Dwarikesh Sugar Industries (2.6%), EID Parry (1.8%) and Eastern Sugar & Industries (2.1%).

The decision to partially decontrol the sugar sector was taken by the Cabinet Committee on Economic Affairs on Thursday.

The government has partially decontrolled the Rs. 80,000- crore sugar sector by giving freedom to millers to sell in the open market and removed their obligation to supply the sweetener at subsidised rates to ration shops.

Mills currently have to sell a portion of the sweetener produced at a fixed rate of about Rs. 20 per kg to the government. After Thursday’s decision, they are free to sell all of their produce in the open market.

The decision will lead to the government’s annual sugar subsidy doubling to Rs. 5,300 crore, while the industry will save about Rs. 3,000 crore per year.