Avadh Sugar & Energy surged 10%. Uttam Sugar Mills, Dalmia Bharat, Shree Renuka Sugar, and Dhampur Sugar Mills rose between 5% and 6%. Balrampur Chini and Bajaj Hindusthan moved up by 1-2%.
Sugar supplies will fall short of demand for the sixth year in the coming season as extreme weather will keep India awat from exporting, according to a Bloomberg report quoting Alvean. India, the second-largest producer of sugar, recorded lower production due to a deficit in rainfall and extra diversion to ethanol, according to analysts.
“Due to the upcoming festive season, demand for sugar is robust. However, since there is no change in production estimate given by ISMA (Indian Sugar Mills Association) in August, sugar prices have risen to a six-year high,” said Pratik Tholiya, vice president- institutional equity research at Systematix. This trend of rising prices will boost profits of sugar companies.
According to a Reuters report in August, the government could bring in export restrictions in the season beginning October for the first time in seven years. The rainfall in Maharashtra and Karnataka, which contribute more than half of sugar output, has been 50% below average this year, the report said.
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