Sugar companies’ stocks surged in Thursday’s trade after Union Minister Nitin Gadkari said that India will achieve its target of 20% ethanol blending in the next two months.
The share price of Dhampur Sugar Mills rallied as much as 8.4% to an intra-day high of Rs 156.91. EID Parry rose 3.3% to trade at Rs 848. The stock of Dalmia Bharat rose 1.45 to Rs 1,762. Shree Renuka Sugars surged 5.3% in Wednesday’s trade as much as Rs 38.69. Bajaj Hindusthan Sugar rose 4.6% to a high of Rs 29.73. Praj Industries advanced 7% to trade at a day’s high of Rs 790.85. Dwarikesh Sugar Industries stocks rose 7% to a high of Rs 51.45, intra-day.
“We will achieve this target of 20 per cent ethanol blending in the next two months. Use of E20 (petrol with 20% ethanol) will help in reducing pollution,” Gadkari said on Wednesday.
The minister for road transport and highways stated that Tata Motors, Mahindra & Mahindra, Maruti Suzuki, and Hyundai Motors have begun producing vehicles that operate on 100% bio-ethanol.
Utilizing ethanol derived from sugarcane, broken rice, and other agricultural products will assist India, the third-largest oil consumer globally, in reducing its dependence on imports.
The practice of blending ethanol with petrol began in 2001 as a pilot project.
During the ongoing crushing season of 2024-25, as of January 15, sugar production in the country has dropped by 20.65 lakh tonnes, which is a decrease of 13.66% compared to the same period last season. By the end of the season, it is anticipated that sugar production might decline by around 50 lakh tonnes.
According to the data from the National Federation of Cooperative Sugar Factories (NFCSF), sugar production in India has hit 130.55 lakh tonnes as of January 15, whereas it was 151.20 lakh tonnes in the corresponding period last year. The estimated total sugar production for this season is 270 lakh tonnes, a decrease from 319 lakh tonnes in the last season. This is in addition to the sugar diverted for ethanol production.
Sugar stocks’ performance in past year
The share price of Dhampur Sugar Mills has risen more than 40% in the last one year meanwhile EID Parry has given a return of 45% in the same time frame.
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