Sugar stocks Balrampur Chini, Bajaj Sugar, others crash up to 7% as centre stops diversion to ethanol
Sugar stocks dropped in early trading following the government's directive to cease sugar diversion for ethanol production. The decision impacts major sugar companies like Balrampur Chini Mills and Bajaj Hindusthan Sugar, which experienced a decline between 2% and 7%. This directive aims to enhance domestic sugar availability amidst rising prices. The government's action follows concerns about…
Sugar stocks experienced a significant drop on Monday following the government's decision to halt sugar-based ethanol supplies for 2026-27. Bajaj Hindusthan Sugar was the worst-performing listed company, with shares falling by 5.22% to Rs 20.16 on the Bombay Stock Exchange. Dwarikesh Sugar Industries and Shree Renuka Sugars also saw declines of 4.45% and 4.43% respectively.
Other affected companies included Dalmia Bharat Sugar and Industries, Dhampur Sugar Mills, Balrampur Chini Mills, and EID Parry India, all of which dropped between 2.55% and 1.57%. The sell-off was primarily due to the exclusion of sugarcane juice, sugar syrup, and B-heavy molasses from the ethanol procurement tender, which leaves sugar mills with limited outlets for their produce, often yielding higher margins.
The government's decision aimed to attract oil marketing companies to divert sugar diversion for ethanol production to zero during the 2026-27 supply year, shifting the focus towards grain-based ethanol. However, the reduced procurement price and incentive for maize-based ethanol may reduce returns for producers. The move comes amid concerns over domestic sugar availability due to poor rainfall in key sugar-producing states, aggravating the competition between sugar supply for domestic consumption and ethanol production.
Written by urgent.news from Times of India's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
Also reported by 1 other outlet
- Sugar stocks tumble: Bajaj Hindusthan, Renuka Sugars plunge up to 5%; here's why timesofindia.indiatimes.com
