The sugar industry, after a strong 2016, has been struggling for the past year following high debts to farmers and crashing sugar prices. The movement towards a genetically modified, high yield cane variety had given sugar companies bumper stocks, which initially boosted revenues and profits.

However, since then, a glut in the market has crashed sugar prices, and investors like Dolly Khanna who were once bullish on sugar, investing in Dhampur Sugar Mills and Dwarikesh Sugar, have cut their investments in these companies. 

Today sugar companies are seeing their share prices rise on the possibility of a bailout package. The government is reportedly mulling ona Rs. 7,000 crore package for sugar mills that are struggling to pay off dues to farmers. This may have been prompted in part by the BJP's defeat in Kairana, which is part of the sugar belt in UP. Farmers made their unhappiness known at the ballot box, and BJP comprehensively lost the seat. 

Proposed government interventions for farmers include the creation of a buffer stock of 30 LMT (lakh metric tonnes). This buffer stock of sugar would remain in the godowns of mills, while the carrying cost (towards interest, storage and insurance charges) for these stocks of around Rs 1,200 crore would be met by the government.