Commodities are expected to trade higher as the ECB action on monetary easing to revive the sagging Euro Zone is a signal that the economy is in doldrums.

Crude oil prices will continue to see weakness as ample supplies and bleak demand will exert downside pressure.

This year's production is slightly higher than last year mainly because the UP mills started their crushing operations almost a week before last year.

After decontrol in April last year, the Rs 80,000 crore sugar industry was anticipating better times ahead but low ex-factory prices dashed all hopes.

Market analysts say among sugar companies, DCM Shriram Industries, KCP Sugar & Industries Corporation and Andhra Sugars can give good returns in the next 12-24 months.

\"We are ready to raise the import tax and allow ethanol blending to 10 per cent, give some soft loans and export incentives for raw sugar but mills need to assure that they will clear farmers' dues\" Food Minister Ram Vilas Paswan said after a meeting of mill owners and representatives of cane growing states.

According to sources, the Food Ministry has calculated the rate of export incentive for August-September at Rs 3,371 per tonne by taking into account the average global raw sugar prices and exchange rate of rupee vis-a-vis dollar during last seven days of preceding month July.

The recent sops for the sugar industry will help only in the short term at best. For long-term health, the most important measure will be to link prices of sugar and cane.

Finance Minister Arun Jaitley's promises of bold budget decisions and broadsides against the \"mindless populism\" of his left-of-centre predecessors have proved a hit with investors, helping the benchmark BSE stock index to a record high last week.

In the non-agri commodities space, the yellow metal has gained grounds once again in the recent weeks and rose nearly six per cent this month.

Traders said that prices may further go up in the coming days as millers are not releasing the stock in anticipation of better returns.

Bajaj Hindusthan rose by nearly 7 per cent to Rs 31.55, while shares of Shree Renuka Sugar, Balrampur Chini, Dwarikesh Sugar, EID Parry, Dhampur Sugar, Simbhaoli Sugar gained by 1-5 per cent at the BSE.

Further, increased off-take by bulk consumers to meet summer season demand also influenced prices.

In order to bail out sugar mills that are unable to pay Rs 11,000 crore dues to sugarcane growers, the government also decided to hike sugar import duty to 40 per cent from the existing 15 per cent and extend subsidy of Rs 3,300 per tonne on export till September this year.

The government has also decided to raise the mandatory blending of ethanol in gasoline to 10 per cent from 5 per cent.

There was a suggestion to hike sugar import duty from 15 per cent to 40 per cent to curb cheap imports and increase ethanol blending in petrol to 10 per cent as an effort to improve the liquidity of mills.

Also, keeping the landmark scheme of Direct Benefit Transfer on LPG or DBTL where customers got subsidy in cash so they could buy cooking gas at market rates, was a mistake, it felt.

The new BJP government has its hands full, with an economy on the skids and an imbalanced fisc. Business leaders are hopeful that quick decision-making will replace the policy inaction that weighed down the second avatar of the Congress-led UPA-II.

In the past fortnight, world market sentiments were largely positive after the easing of geopolitical tensions between Ukraine and Russia. Further, favorable economic data from the Euro Zone and the UK supported an upside in the markets.

An informal group of ministers (GoM), headed by Agriculture Minister Sharad Pawar, has approved incentives to the sugar industry for exports of up to 40 lakh tonnes of raw sugar for two years.