Sugar Stocks: Shares of sugar and ethanol production companies surged on BSE following the government’s decision to allow sugar mills to use cane juice or syrup for ethanol production starting November 1, 2024. This policy shift aims to boost renewable energy usage and reduce fossil fuel dependence.
Shares of sugar and ethanol production companies on Friday surged up to 13% on BSE after the Union government announced that it will allow sugar mills to use cane juice or syrup to produce ethanol, starting November 1, 2024.
Balrampur Chini Mills shares rose 8.15% to its all-time high of Rs 625.85, while the shares of Praj Industries shot up by 7.6% to day’s high of Rs 785. Shares of Shree Renuka Sugars rallied 9.8% to Rs 52.01.
Meanwhile, the shares of Dalmia Bharat Sugar and Industries along with Globus Spirits also made their fresh 52-week highs of Rs 499.20 after rising 13% and Rs 1,019.15 after surging 13.2% respectively.
Other sugar company stocks that witnessed a surge in their share price were Dhampur Sugar Mills, Mawana Sugars, Rajshree Sugars & Chemicals and Dwarikesh Sugar Industries. The shares of these companies were also up by 7-9% in an early trading session on BSE.
Other sugar company stocks that witnessed a surge in their share price were Dhampur Sugar Mills, Mawana Sugars, Rajshree Sugars & Chemicals and Dwarikesh Sugar Industries. The shares of these companies were also up by 7-9% in an early trading session on BSE.
The policy shift announced in a notification on August 29, 2024, removes the previous cap on sugar diversion for ethanol.
In addition to cane juice and syrup, the new policy permits the use of B-Heavy molasses and C-Heavy molasses for ethanol production. According to the Ministry of Consumer Affairs, Food and Public Distribution, “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.” This adjustment is intended to support the government’s goals of increasing renewable energy usage and reducing dependence on fossil fuels.
The government has also authorized distilleries to purchase up to 2.3 million metric tons of rice from the Food Corporation of India specifically for ethanol production. This measure is aimed at boosting ethanol output and supporting the broaderstrategy of blending ethanol with fuels.
To ensure the policy does not disrupt domestic sugar availability, the Department of Food and Public Distribution (DFPD) and the Ministry of Petroleum and Natural Gas (MoPNG) will collaborate to monitor and review the diversion of sugar to ethanol production.
This policy change is part of the government’s ongoing effort to increase ethanol production and promote sustainable energy practices. By allowing a broader range of sugar derivatives for ethanol production, the governmentaims to enhance the efficiency and flexibility of the ethanol supply chain while safeguarding the stability of domestic sugar supplies.
