Sugar stocks rose on expectations that shortage in sugar supplies globally will aid domestic sugar prices and increase realisation.
Sugar stocks in the spotlight for yet another session on Wednesday amid a global rally in sugar prices. In the morning trade (at 10.19 am) on Wednesday, share price of sugar majors such as KCP Sugar Industries, Shree Renuka Sugars, Rajshree Sugars, Dharani Sugars, Indian Sucrose and Balrampur Chini Mills were up 9.68 per cent, 6.48 per cent, 4.56 per cent, 2.12 per cent, 4.87 per cent and 2.43 per cent, respectively.
There are expectations that shortage in sugar supplies globally will aid domestic sugar prices and increase realisation. Sugar prices have already jumped around 25 per cent during August 1 and November 17 this year.
On Tuesday, 15 stocks of sugar companies hit their 52-week high on Tuesday. Simbhaoli Sugars, Ugar Sugar Works, Dwarikesh Sugar, Uttam Sugar, Sir Shadi Lal, Mawana Sugars, Dharani Sugars, Balrampur Chini, Dhampur Sugar, Oudh Sugar Mills, Rana Sugar are some of the stocks that hit their new 52-week high in Tuesday’s trade.
According to an ICRA report, India’s sugar output is estimated to decline 4.62 per cent to 26.8 million tonnes in the 2015-16 marketing year (October-September).
Marketmen believe the sugar counter is witnessing strong buying on hopes of improved realisations as shortage of sweetener supply is expected to aid sugar prices and help companies make good realisations.
The ICRA estimate is higher than the government’s projection of 26 million tonnes of sugar output this year, but slightly lower than industry body ISMA’s estimate of 27 million tonnes for the same period.
(With agency inputs)