The sugar stocks have rallied as much as 20% in early trade today. The stock surged as much as 20%. The uptick in sugar stock prices came after the Government lifted the cap on ethanol production. It has now permitted sugar mills and distilleries to produce ethanol from sugarcane juice, sugar syrup, B-heavy molasses, and C-heavy molasses during the Ethanol Supply Year 2025-26 without any restrictions.

Sugar stocks up 20%

Rajshree Sugars & Chemicals surged the most in Tuesday’s trade. It was followed by Shree Renuka Sugars and Dhampur Sugar Mills, which rose over 11.5%. 

The list of sugar sector stocks is all green with brisk all-around buying. The other big movers include the likes of Sakthi Sugars, Dwarikesh Sugar, Ugar Sugar, Uttam Sugar, Rana Sugars, Bajaj Hindustan Sugar, Mawana Sugars, Avadh Sugar & Energy, Balrampur Chini Mills, and others.

Why has Govt lifted cap on ethanol production? 

Removing the cap on the production of ethanol is a part of the ongoing effort to promote ethanol blending in fuel while ensuring sufficient sugar availability for domestic consumption.

Sugar mills and distilleries are allowed to produce ethanol from sugarcane juice/sugar syrup, BHM, as well as CHM during ESY 2025-26 without any restriction, as read in a circular issued by the Department of Food and Public Distribution (DFPD) to sugar mills and distilleries.

The DFPD, in collaboration with the Ministry of Petroleum and Natural Gas (MoPNG), will conduct regular assessments of the allocation of sugar for ethanol production in relation to the sugar output in the country, ensuring that there is consistent availability of sugar for domestic use all year round.

In 2023-24, the Indian government directed all sugar mills not to use sugarcane syrup or juice for the production of ethanol, except for B-heavy molasses. This was because sugar production was expected to be lower in the 2023-24 season.

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