Sugar Stocks Rally Up To 3% as Prices Surge Ahead of Festive Season

Aug 28: Shares of sugar companies rallied in early trade on Friday, with Shree Renuka Sugars (RENUKA), Bajaj Hindusthan Sugar (BAJAJHIND), Balrampur Chini Mills (BALRAMCHIN) and Triveni Engineering and Industries (TRIVENI) all trading higher, as a rally in domestic sugar prices amid supply concerns ahead of the festive season lifted sentiment across the sector. The gains came even as the government moved to ease supply pressure, allowing 1 million tonnes of duty-free sugar imports and permitting refiners to divert export-bound sugar to the domestic market. 

Government Eases Supply Concerns 

The government reportedly allowed Indian refiners to divert 350,000 tonnes of refined sugar that had been earmarked for overseas markets to domestic buyers. The diverted stockpiles could reach the local market within a week, potentially adding enough supply to meet nearly five days of India’s total sugar demand. Separately, the government has allowed 1 million tonnes of duty-free sugar imports as part of broader efforts to improve domestic availability. The moves come as sugar prices have surged amid concerns over domestic availability ahead of the festive season, when demand for sugar typically climbs sharply across the country. 

Stock Moves 

Shree Renuka Sugars (RENUKA) led gains among the sugar counters, rising as much as 3.33 per cent to Rs 24.21 in trade, from a previous close of Rs 23.43. The stock opened at Rs 23.63 and touched an intraday high of Rs 24.79 against a low of Rs 23.55, with a VWAP of Rs 24.22. 

Bajaj Hindusthan Sugar (BAJAJHIND) climbed 2.42 per cent to Rs 21.62, off a previous close of Rs 21.11. The stock opened at Rs 21.13 and hit a high of Rs 22.08 against a low of Rs 21.13, with the VWAP at Rs 21.65. 

Balrampur Chini Mills (BALRAMCHIN) added 0.68 per cent to Rs 654.35, against a previous close of Rs 649.95. The stock opened at Rs 649.60 and moved between Rs 645.65 and Rs 665.80 through the session, with the VWAP at Rs 656.37. 

Triveni Engineering and Industries (TRIVENI) was the relative laggard among the four counters, up a modest 0.11 per cent at Rs 282.53, compared with a previous close of Rs 282.21. The stock opened higher at Rs 285.30 and swung between Rs 287.93 and Rs 279.42 during the session, with the VWAP at Rs 283.12. 

Why It Matters 

Sugar prices in India have been on an upward trajectory in recent weeks, with tight domestic availability stoking concerns just as demand typically picks up ahead of the festive season, when sweets and confectionery consumption rises sharply across the country. The rally in sugar counters reflects that pricing strength, even as the government’s decision to release export-bound stockpiles into the domestic market and allow duty-free imports signals its intent to keep a lid on further price increases. For sugar producers, firmer realisations over a limited period support near-term earnings, which has kept investor appetite for the sector intact despite the extra supply set to arrive. 

Outlook 

Traders will watch how quickly the diverted 350,000 tonnes of refined sugar and the 1 million tonnes of duty-free imports flow into the domestic market, and whether the added supply is enough to cool prices heading into the festive season. Until then, sugar stocks are likely to continue tracking movements in domestic sugar prices and any further policy signals from the government on managing availability. 

Source

• nseindia.com