Stories
Sugar Stocks Surge Up To 9% As Global Prices Hit 18-Month High
- •Shares of major sugar companies like Balrampur Chini, Dalmia Bharat Sugar, and Dhampur rallied up to 9 percent on Tuesday.
- •Global raw sugar prices climbed to an 18-month high driven by tightening supplies and production concerns in Thailand, the EU, and Brazil.
- •India faces a potential sugar shortfall of around 2 million tonnes, which may require imports and crucial policy decisions by the government.
- •Weather-related risks, including recent rains in Uttar Pradesh and weaker rainfall in Maharashtra and Karnataka, threaten domestic cane crops.
- •The government has implemented duty-free imports of raw sugar and stock limits for dealers to manage domestic supplies effectively.
Key Questions Answered
Shares of sugar companies surged up to 9% on Tuesday, October 6, driven by a significant surge in global sugar prices, which hit an 18-month high, and growing concerns surrounding India's domestic supply outlook.
India's sugar stocks stood at around 36 lakh tonnes as of October 1. Industry experts estimate that inventories will settle around 50-55 lakh tonnes, with the country facing a potential sugar shortfall of about 2 million tonnes that may require imports.
The government permitted duty-free imports of up to 1 million tonnes of raw sugar under the Tariff Rate Quota until October 31, and imposed a stock limit of 1,000 quintals on dealers from October 15 to November 30. Officials may also halt the diversion of sugar to ethanol if availability tightens.
