Sugar and ethanol stocks experienced a notable surge today, driven by the announcement of government plans to permit sugar exports and a reduction in the price of FCI rice for ethanol production. As of the latest updates, the majority of stocks are showing positive momentum in the market.
Among the top gainers, Ugar Sugar Works Ltd rose by 7.69%, followed by Gulshan Polyols Ltd at 7.32%, and Davangere Sugar Company Ltd at 6.15%. Other notable performers include Magadh Sugar & Energy Ltd (up 5.97%), Sbec Sugar Ltd (up 4.45%), and Uttam Sugar Mills Ltd (up 4.18%). Additionally, stocks of Dalmia Bharat Sugar & Industries Ltd, Mawana Sugars Ltd, and BCL Industries Ltd also reported significant increases.
The rally in stock prices is primarily attributed to two key developments. Firstly, the Indian government’s decision to allow the export of 10 lakh metric tonnes (LMT) of sugar has injected confidence into the market. While the official notification is still pending, the move is expected to provide financial relief to sugar millers, potentially aiding them in clearing outstanding cane dues. This, in turn, is expected to support domestic sugar prices, further benefiting the sector.
Secondly, the government’s reduction in the price of FCI rice for ethanol production to Rs 2,250 per quintal, down from the previous Rs 2,800 per quintal, is seen as a significant boost for distilleries. The price cut is anticipated to lower production costs for ethanol, encouraging higher output and benefiting ethanol producers.
The combined effect of these announcements has led to positive sentiment in the sugar and ethanol sectors, with stocks of several companies showing substantial gains on Monday.
