Mumbai: The Centre has removed caps on ethanol production leading to a spurt in sugar stock prices on August 30, 2024 (Friday). As soon as trading started today, sugar stock prices started moving up.
Balarampur Chini Mills, Dhampur Sugar shares in focus
By 10:30 am, Dhampur Sugar rose 6.51% and stood at Rs 225.75, Balarampur Chini Mills stock rose 5.64% and stood at Rs 611.45, Shree Renuka Sugars stood at Rs 50.14 after rising 5.76% in early trades.
The price of Uttam Sugar Mills rose 4.34% and reached Rs 354.95. Dwarikesh Sugar Mills stock price moved up 4.91% and reached Rs 77.20. Avadh Sugar & Energy stocks rose 5.82% and reached Rs 748 by 10:30 am.
Why stocks of Sugar companies are rising
The central government has made a significant policy change by allowing sugar mills to channelise sugar towards producing ethanol for the impending Ethanol Supply Year of 2024-25. The related change in policy has been mentioned in a notification on Thursday, August 29, 2024.
The government imposed curbs on using sugar to produce ethanol late last year. In 2023 the Centre had directed all sugar mills not to use sugarcane juice or syrup for making ethanol since there was a forecast of sugar production going down for the 2023-24 year. The 2023-24 sugar year began in October 2023, while the ethanol supply year kicked off in November.
Flexibility in ethanol produciton
The shift in policy on August 29, 2024 is aimed at increasing ethanol production in the country and encouraging cleaner energy usages. By allowing more sugar derivatives for ethanol production, the government wants to raise the efficiency of ethanol production and simultaneously safeguard domestic sugar supplies.
New types of molasses
The new policy states that in addition to cane juice and syrup, B-Heavy molasses and C-Heavy molasses can be used for ethanol production. The ministry of consumer affairs, food and public distribution has said, “Sugar mills and distilleries are allowed to produce ethanol from sugarcane juice/sugar syrup, B-Heavy molasses as well as C-Heavy molasses during ESY 2024-25 as per the agreement with OMCs.”
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Sugar stocks today: Prices of all sugar stocks rose between 4% and 6% in early trades on August 30. The share price of Dhampur Sugar, Balarampur Chini Mills, Uttam Sugar Mills and Dwarikesh Sugar Mills witnessed a jump. Markets Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
