Sugar Stocks Rally Up To 10% Amid Fears Of Shortage; Uttam, Avadh, Dalmia Top Gainers – News18


Last Updated: September 06, 2023, 11:58 IST

Sugar Stocks Rise Today: Shares of sugar companies surged up to 10 per cent on the BSE in Wednesday’s intra-day trade on the back of heavy volumes as sugar prices rose to a six-year high on Tuesday, amid concerns over a deficient monsoon.

The gains have been on the back of an over 3 per cent jump in the price of sugar in a fortnight to their highest level in six years. A Reuters report quoted traders and industry officials attributing limited rainfall in the country’s key growing regions to be the reason for this panic hinting at a fall in production in the upcoming season.

Higher prices will, however, improve margins for producers such as Balrampur Chini, Dwarikesh Sugar, Shree Renuka Sugars and Dalmia Bharat Sugar, helping them make payments on time to farmers, according to dealers.

“Sugar mills are worried that production could fall sharply in the new season because of drought. They are not willing to sell at lower prices,” the report said, quoting Ashok Jain, president of the Bombay Sugar Merchants Association.

Among individual stocks, Uttam Sugar Mills hit a 52-week high of Rs 440, as they surged 10 per cent on the BSE on two-fold jump in trading volumes. Dalmia Bharat Sugar soared 8 per cent to Rs 436.40. The stock was trading close to its 52-week high of Rs 440.55 touched on December 19, 2022.

Avadh Sugar & Energy, Shree Renuka Sugars, Magadh Sugar & Energy, EID Parry, Bannari Amman Sugars, Dhampur Sugar Mills, Dwarikesh Sugar, Ugar Sugar Works and Balrampur Chini Mills were up in the range of 2 per cent to 8 per cent. In comparison, the S&P BSE Sensex was up 0.04 per cent at 65,804 at 09:53 AM.

Meanwhile, the Indian government is expected to ban mills from exporting sugar in the next season beginning October, halting shipments for the first time in seven years, as a lack of rain has cut cane yields, the news agency reported last month, quoting government sources.

Monsoon rains in the top sugarcane-growing belts of Maharashtra and Karnataka – which together account for more than half of India’s total sugar output – have been as much as 50 per cent below average so far this year.

Post estimates that lower domestic stocks combined with elevated diversion of sugar to ethanol and alcoholic beverages will drive prices higher in the near term, barring government interventions, Uttam Sugar Mills said in FY23 annual report.

Given sugar inventories are the lowest in the last five years, domestic sugar prices have moved higher since April. Further, sugar prices are expected to remain firm until November 2023 (crushing generally starts post-Diwali), according to analysts at ICICI Securities.

Disclaimer:Disclaimer: The views and investment tips by experts in this report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decisions.


Source link


Please enter your comment!
Please enter your name here