Shares of sugar stocks gained up to 10% domestically, as the world’s biggest trader projected that the low rainfall will result in a year with sugar shortages. Swiss firm Avlean noted that as a result of bad crops in India, the second-largest sugar producing country, there will be a sugar deficit for the sixth straight year. “Global markets will face a 5.4 million metric ton deficit of the sweetener in the coming season,” said an intelligence lead to Bloomberg.
As a result, sugar stocks in India gained sharply. Shree Renuka led the pack with an impressive surge of 8.3%, while EID Parry closely followed with a 7.06% increase in its share price. Balrampur Chini also contributed to the sector’s growth, recording a gain of 2.6%. Triveni Engineering and Industries displayed a 4% rise, further strengthening the overall performance of sugar stocks. Dalmia Bharat Sugar and Industries saw a substantial increase of 7.95%, and Dhampur Sugar Mills performed exceptionally well with an 8.10% gain.
In the upcoming season starting in October, it’s expected that the Indian government will put a halt to sugar mills exporting their products, which would mark the first time this has happened in seven years. This move comes as a result of reduced cane yields due to insufficient rainfall, as reported by a news agency last month, citing government sources.
This year, the monsoon rains in the key sugarcane-growing regions of Maharashtra and Karnataka, responsible for more than half of India’s total sugar production, have fallen significantly short of the average, by as much as 50 percent.
