Diversion of sugarcane towards ethanol blending is pushing sugar prices higher across the country
Shares of Shree Renuka Sugars and Rajshree Sugars hit the upper circuit of 5 percent in early trade on December 10, and were locked at Rs 33.20 and Rs 33.70, respectively, on the BSE.
Gayatri Sugars was also at the upper circuit limit, while peer stocks such as Bajaj Hindusthan and Sakthi Sugars were up over 3 percent and 2 percent.
Sugar stocks have seen a healthy rally over the past month on the back of rising global prices of the commodity. On December 9, stocks like Balrampur Chini, Dalmia Bharat and Triveni Engg had gained as much as 10 percent in trade.
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Most stocks are, however, still away from their 52-week highs. While Shree Renuka is 30 percent off its 52-week high, Rajshree Sugars is over 10 percent away. Bajaj Hindusthan and Sakthi Sugars are 30-40 percent off their 52-week highs.
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Experts believe that there is a scope for upside in these stocks due to several factors. The industry has seen a significant reduction in sugar inventory over the past one year, even as more sugarcane is being diverted towards ethanol blending, pushing the sugar prices higher.
Analysts believe that the domestic sugar prices will remain firm above Rs 36 per kg for the rest of FY22.
