Sugar Stocks Surge as Government Reverses Ban on Ethanol Production Sources

Sugar Stocks Surge as Government Reverses Ban on Ethanol Production Sources

VoM News Desk | December 18, 2023 | 02:26 PM IST | Breaking News | Follow on Google News

Sugar Stocks Surge as Government Reverses Ban on Ethanol Production Sources Image/Bloomberg

Sugar Stocks Surge as Government Reverses Ban on Ethanol Production Sources

Today’s trading session witnessed a notable surge in sugar stocks, marking gains of up to 7.7%. This sudden upswing follows a recent order from the food ministry that rescinded the prior ban on using sugarcane juice for ethanol production. The updated directive now permits the utilization of both sugarcane juice and B-heavy molasses for green fuel production during the 2023–24 supply year.

The government’s decision to reverse the ban, which was initially declared on December 7, prohibiting the use of sugarcane juice or sugar syrup for ethanol production in the ethanol supply year (ESY) 2023–24, caused a significant uptick in major sugar stocks during today’s trading session.

Among the key beneficiaries, Bajaj Hindusthan Sugar led the gains with a remarkable 7.7% rise to ₹30.20 apiece. Following suit were other major players such as Dhampur Sugar Mills (up 6.59%), Dalmia Bharat Sugar (up 6%), Uttam Sugar Mills (up 5.7%), Sakthi Sugars (up 5.2%), Balrampur Chini Mills (up 5.1%), Rajshree Sugars & Chemicals (up 5%), Praj Industries (up 4.46%), and Triveni Engineering (up 3.8%).

The government projects a decline in sugar production for the 2023–24 season, estimating a range between 32.3–33 million tonnes compared to the 37.3 million tonnes produced in the previous season. Domestic consumption is anticipated to hover around 28–29 million tonnes.

At the recent G20 summit, India introduced the Global Biofuels Alliance, emphasizing the primary goal of increasing ethanol blending with petrol to 20%. It’s noteworthy that India had surpassed its 10% ethanol blending target for the Ethanol Supply Year (ESY) 2021–22 ahead of the planned deadline of November 2022. Building on this achievement, the country is now aiming for an ambitious 20% blending rate by 2025–26, aligned with its commitment to further boost biofuel utilization in the national energy mix.

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