Stories
Sugar Stocks Drop 6 Percent After Government Halts Ethanol Diversion
- •Sugar stocks including Bajaj Hindusthan and Shree Renuka fell up to 6 percent in early trade following the government directive to reduce sugar diversion for ethanol production to zero for the 2026/27 supply year.
- •The latest ethanol tender excludes supplies produced from sugarcane juice, sugar syrup, and B-heavy molasses to protect domestic sugar supplies and ease record high prices.
- •Major companies such as Balrampur Chini Mills, EID Parry, and Triveni Engineering saw their shares decline between 2 percent and 6 percent in morning trade.
- •The decision aims to increase domestic sugar availability and control rising food prices amid concerns over weak rainfall in key producing states.
- •State-run oil marketing companies issued a tender for around 11 billion litres of ethanol while also lowering the procurement price for maize-based ethanol.
Key Questions Answered
Sugar stocks fell after the government directed oil marketing companies to reduce sugar diversion for ethanol production to zero for the 2026/27 supply year. The move aims to increase domestic sugar availability and ease record-high prices in India.
State-run oil marketing companies have barred ethanol made from sugarcane juice, sugar syrup, and B-heavy molasses from their latest procurement tender for the 2026-27 supply year. This tender was issued by Bharat Petroleum Corporation Ltd on behalf of oil marketing companies to meet 20% ethanol blending requirements in petrol.
The government cut the incentive for maize-based ethanol by lowering its procurement price to Rs 68.86 per litre from Rs 71.86. This shift emphasizes grain-based production as feedstock availability and distillery capacity become key factors in meeting nationwide blending targets.
