The price of sugar has been rising since the government mandated to increase the ethanol blending in fuel from 7.7% to 20% by 2025. The increase could be a warning: we will have to pay more attention to sugar. Sugar companies are seeing a vast demand for ethanol for the blending program, which can benefit the industry in the future. The sugar companies are encouraged to add sugarcane juice and grain-based ethanol capacities further.
The sugar sector is pushed by domestic demand and global factors; analysts see a tight global demand-supply situation for environmental and development reasons. “There is a greater government focus in increasing the blending of ethanol with automotive fuel, increasing to in excess 7.23 per cent today and likely to increase further following Brazil’s example of 48 per cent," the management of Dwarikesh Sugar Industries said in its annual report for the financial year.
Shares of big companies such as Renuka Sugars, Bajaj Hindustan, Rana Sugar, KM Sugar Mills, Mawana Sugar, Uttam Sugar, KCP Sugar, and Sakthi Sugar have already made new records on June 28th. And the huge demand will take time to meet its balance. Is it too late to invest in sugar stocks?
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