Sugar stocks: Sugar company stocks witnessed a sharp rise today on 16 September. This rise has come after a move by the government, which is expected to increase the earnings of sugar mills. The Department of Food and Public Distribution (DFPD) has allowed sugar mills and distilleries to make rectified spirit (RS) and extra neutral alcohol (ENA) from sugarcane juice and B-heavy molasses.
The government has also recently approved ethanol production from sugarcane juice, B-heavy and C-heavy molasses for the Ethanol Supply Year (ESY) of 2024-25. After this decision, the stocks of the sugar sector rose tremendously. Shares of Dhampur Sugar Mills, Bajaj Hindustan Sugar, Balrampur Chini Mills, Dalmia Bharat, Avadh Sugar, Mawana Sugar, Shri Renuka Sugar, and Triveni Engineering registered a gain of more than 2%.
Besides, DCM Shriram Industries, Dharani Sugar, Bannari Amman Sugar, Devangare Sugar Company, and EID Parry also witnessed gains of 1-2%.
Experts say that with India having adequate sugar stocks, the plan to blend ethanol in fuel can be resumed as it was till the crushing season 2023. However, in December 2023, the government banned the use of sugarcane juice or sugar syrup for ethanol production in 2023-2024 ESY (December-November) to ensure adequate availability of sugar for domestic consumption and keep prices under control.
Official data shows that the ethanol blending programme in India has reached 13.3% by July of the current season, up from 12.6% during the 2022-2023 season. At present, the country’s total ethanol production capacity is 1,589 crore liters. Out of this, oil marketing companies purchased 505 crore liters of ethanol for the purpose of ethanol blending during the 2023-2024 season.
Let us tell you that India is the second largest sugar producing country in the world after Brazil, and the government is planning to achieve the target of 20% ethanol mix by 2025-26.
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