Sugar stocks fell substantially on Thursday following a government meeting, to regulate domestic sugar prices by limiting the use of sugarcane juice to manufacture ethanol during the current season, in order to assure adequate supply of sugar in the local market.
To achieve the goal of 20 percent ethanol blending in transportation fuel by 2025 to lessen dependency on fossil fuels, sugar industries saw a massive increase in their stock price in recent months as ethanol demand from oil firms increased.
Sugar stocks saw heavy selling in the last two trading sessions, following an Indian government plan to control domestic sugar prices by diverting supplies away from ethanol production. This restriction aimed at the Indian government to keep sugar prices from soaring, especially ahead of the 2024 general election.
According to government sources, no plan to limit ethanol output is currently being considered, according to CNBC-TV18. The clarification came following media reports that ethanol production from sugarcane would be reduced to combat India’s sugar shortage.
Indian Sugar Mills Association (ISMA), a trade body of sugar producers, last month reported that India’s sugar production may fall 8 percent to 33.7 million metric tons (without considering diversion towards ethanol) in 2023-24.
Here are the major sugar producer stocks that witnessed a heavy fall in their prices
Dalmia Bharat Sugar and Industries Ltd
Dalmia Bharat Sugar and Industries Ltd shares fell 7.7 percent to Rs 399.55 on Thursday, from the previous close price of Rs 433.25 crores. The company has a market capitalization of Rs 3,353 crore.
Shree Renuka Sugars Ltd
Shree Renuka Sugars shares fell 5.4 percent to Rs 46.59 on Thursday from the previous close price, with a market value of Rs 10,269 crores.
Balrampur Chini Mills Ltd
Balrampur Chini Mills shares fell 7.4 percent to Rs 399.10 on Thursday, from the previous close price of Rs 431.30 crores. The company has a market capitalization of Rs 8,549 crore.
Dwarikesh Sugar Industries Ltd
Dwarikesh Sugar Industries shares fell 5 percent to Rs 85.44 on Thursday from the previous close price, with a market value of Rs 1,646 crores.
E I D-Parry (India) Ltd
E I D-Parry (India) shares fell 7 percent to Rs 526 on Thursday, from the previous close price of Rs 564.65 crores. The company has a market capitalization of Rs 9,577 crore.
Triveni Engineering and Industries Ltd
Triveni Engineering and Industries shares fell 7.4 percent to Rs 336.55 on Thursday, from the previous close price of Rs 363.30 crores. The company has a market capitalization of Rs 7,728 crore.
Written by Omkar Chitnis
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