Sugar stocks Balrampur Chini, Triveni Engineering, Dhampur Sugar and others rally up to 7%. Here’s why

Shares of sugar companies, including Balrampur Chini Mills, Dhampur Sugar, Dalmia Bharat, Shree Renuka Sugars and EID Parry, rallied up to 7% after raw sugar prices climbed to a one-year high of 16.6 cents per pound, while white sugar prices rose to their highest level in 15 months. In India, sugar prices surged nearly 10% over the past month amid growing concerns over crop prospects in key producing regions.

Domestic sugar prices in Mumbai are currently quoted at Rs 5,000-5,090 per quintal. Traders said deficient rainfall has further added a premium to prices, strengthening the bullish sentiment ahead of the upcoming festival demand season.

The rally comes amid a rapid surge in global sugar prices. US raw sugar prices moved above the $15/lb resistance level to $16/lb, while London White Sugar climbed to a 15-month high of more than $500 a tonne.


In today’s session, Balrampur Chini Mills gained 5% to Rs 654 on the BSE, while Dhampur Sugar Mills gained 5% to Rs 168 per share. Uttam Sugar gained 5% to Rs 278 per share. Triveni Engineering shares rose the most, rallying 7% to Rs 283, while EID Parry gained over 2% to Rs 794.

What’s moving stocks?

A key trigger is the worsening supply outlook in Brazil, the world's largest sugar producer. The country has warned of a delay in the harvest amid adverse weather conditions. Adding to uncertainty, Brazil has suspended its bi-weekly harvest and production reports, leaving investors with limited visibility on the supply situation.

The shift towards ethanol is further intensifying concerns over a potential sugar supply crunch. In June, 58% of Brazil's cane juice was diverted towards ethanol, as ethanol is likely to be more profitable than sugar. Brazil also raised its mandatory ethanol blending target to 32% in July from 30% in June, significantly higher than the 25-27% mix seen just months earlier.

Supply concerns are not limited to Brazil. Intense heatwaves and El Niño conditions across the EU and the UK have added to fears of tighter supplies, with sugar output from the region trimmed to 14.98 million tonnes. In Asia, Thailand, the world's third-largest sugar producer, has cut its projected output by 15.6% to 9.5 million tonnes. India, the world's second-largest sugar producer after Brazil, is also projecting lower sugar production. Authorities are physically verifying mill volumes to enforce strict hoarding limits.

Global deficit estimates also point to a tighter market. Green Pool has projected a global sugar deficit of 3.3 million tonnes, while StoneX has estimated the shortfall at 1.7 million tonnes. The International Sugar Organisation has forecast a deficit of 0.26 million tonnes.

With production concerns mounting across major sugar-producing regions and global benchmark prices continuing to climb, the supply outlook has emerged as the key factor driving the sharp move in sugar prices.

India may cut exports

India, the world's second-largest sugar exporter, is expected to have little surplus for export for at least three more seasons as El Niño weather conditions threaten cane production and rising ethanol demand squeezes supply.

The twin pressures are poised to keep millions of tonnes of sugar off the world market, tightening supplies for importers across Asia, Africa and the Middle East and supporting benchmark prices in London and New York.

A Reuters report stated that government sources and farmers expect lower cane availability and rising ethanol demand to leave little sugar for exports for several years. Dealers at global trading houses have also warned their head offices of shrinking opportunities in India, according to trade sources.

India exported an average of 6.8 million metric tonnes of sugar annually in the five seasons through 2022-23, accounting for about 10% of global shipments. This year, after exporting around 800,000 tonnes, India banned shipments until September 30, the end of the season.

A prolonged absence of surplus from major suppliers would remove a key balancing supplier as weather risks and biofuel policies reshape global sugar trade flows.

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