Sugar stocks rally: Avadh Sugar, Zuari Industries, Balrampur Chini Mills, Dwarikesh Sugar jump up to 14% as govt tightens stockholding limits

Sugar stocks experienced a significant rally on Thursday, with several major players in the industry jumping up by up to 14 percent. This surge came as the government tightened limits on sugar stockholding, aiming to address the issue of record-high prices. The Ministry of Consumer Affairs, Food & Public Distribution imposed restrictions on bulk consumers who use more than 10 metric tons of sugar per month, prohibiting them from holding more than 15 days' worth of stock.

These new rules are set to take effect on September 1, 2023, and will remain in force until November 30, 2026.

The spike in sugar prices, up 10 percent over the past month, has forced the government to take action to stabilize the market. With supplies tightening and festival demand on the rise, it is expected that sugar prices will remain high for at least the next three months. Avadh Sugar & Energy led the charge, surging 10.5 percent to reach a new 52-week high of ₹815.10 on the BSE.

Zuari Industries also saw gains, with shares climbing 8.5 percent to ₹284.35. Bannari Amman Sugars experienced a 5 percent increase, closing at ₹3,818, while Balrampur Chini Mills soared over 8 percent, reaching a fresh 52-week high of ₹706.

Other companies in the sugar sector also benefited from the price surge, with Bajaj Hindustan Sugar rising over 8 percent to reach ₹22.10, nearing its 52-week high of ₹23.30. Shree Renuka Sugars experienced a 6.6 percent gain, climbing from ₹24.24 to ₹25.84. EID Parry India gained 1.6 percent, closing at ₹800.30. Dalmia Bharat, Uttam Sugar, and Magadh Sugar also reported gains, with Dwarikesh Sugar leading the pack with a 14 percent increase.