Sugar rush! Balrampur Chini, Dhampur Sugar, & other sugar stocks rally in trade; here's why

Sugar stocks are in vogue on Dalal Street, primarily boosted by concerns about price hikes in the refined segment and the government’s push towards doubling ethanol blending in petrol by 2025. On Thursday, stocks of the likes of Balrampur Chini Mills, Dhampur Sugar Mills, Dwarikesh Sugar, Dalmia Bharat Sugar, Magadh Sugar & Energy, Avadh Sugar and Shree Renuka Sugars rallied in an otherwise subdued market.

India's sugar production fell 3 per cent to 299.6 lakh tonnes in the first six months of the 2022-23 marketing year ending September, a PTI report said quoting industry body Indian Sugar Mills Association (ISMA) on Wednesday. This raises price hike concerns in refined sugar amid lower output. 

ISMA has projected production for 2022-23 to 340 lakh tonnes against 358 lakh tonnes in the 2021-22 marketing year. Sugar output stood at 309.9 lakh tonnes in the corresponding period of the previous year. 

The sugar marketing year runs from October-September. 

In this regard, All India Sugar Trade Association Chairman Praful Vithalani while speaking to Zee Business said the prices are unlikely to rise in the domestic market, unlike the global scenario. Amid an imbalance in supply-demand, global prices have jumped by 10 per cent in March so far. 

Vithalani believes that the domestic prices, which are controlled by the government, should be raised by Rs 2-3 per kg mainly to compensate sugar farmers for high sugarcane plantation costs. 

The AISTA chief’s view was also echoed by ISMA’s Director General Sonjoy Mohanty. While speaking to Zee Business in a panel discussion, Mohanty said a marginal price hike can be seen further, however, the chances of the same are very less as the demand-supply in the domestic market is quite favourable. 

Earlier in February 2023, the central government had rolled-out petrol blended with 20 per cent ethanol at select petrol pumps in 11 states and union territories as part of a programme to increase the use of biofuels to cut emissions as well as dependence on foreign exchange-draining imports. 

At present, 10 per cent ethanol is blended in petrol (10 per cent ethanol, 90 per cent petrol) and the government is looking to double this quantity by 2025, as per a PTI report.  

The sugar stocks soared up to 9 per cent on the BSE intra-day trade in an otherwise subdued market. Among major sugar makers,