Indian sugar stocks surge up to 45% in a month on tight supply and ethanol outlook
Indian sugar stocks have rallied up to 45%, outperforming the NSE 50, driven by expectations of tighter closing stocks, possible MSP hike, and rising ethanol demand amid high crude prices. However, recent profit booking triggered short-term declines across major counters.
Shares of Indian sugar companies have staged a sharp rally over the past month, surging up to 45 per cent and dramatically outpacing the broader market, as investors factor in expectations of tighter closing stocks, a long-pending minimum selling price (MSP) revision, and strengthening ethanol demand, RuralVoice reported on April 24, 2026.
While the National Stock Exchange’s benchmark NSE 50 index gained around 4.3 per cent in the period, sugar stocks have moved far ahead. Among the top 20 listed sugar companies, 16 recorded gains of more than 10 per cent and nine saw their shares climb by over 20 per cent, the report noted.
Among the five largest companies by market capitalisation, Bajaj Hindusthan Sugar posted the sharpest one-month rise at 21.57 per cent, followed by Shree Renuka Sugars at 14.24 per cent, Triveni Engineering and Industries at 12.48 per cent, Balrampur Chini Mills at 8.19 per cent, and EID Parry India at 6.47 per cent. In the broader segment, Simbhaoli Sugars led all gainers with a jump of 45.88 per cent, while Andhra Sugars rose 34.80 per cent, Rana Sugars climbed 25.14 per cent, Sakthi Sugars gained 24 per cent, and Mawana Sugars added 29.98 per cent over the same period.
However, the report noted that the most recent trading session saw broad-based declines across most sugar counters, with major companies including Balrampur Chini Mills, Dalmia Bharat Sugar, Dwarikesh Sugar Industries, and Shree Renuka Sugars recording sharper falls. Only Simbhaoli Sugars and Dolex Agrotech ended in positive territory on that day.
Tighter closing stocks
A primary driver of the rally, according to industry sources cited by the report, is the expectation that closing sugar stocks at the end of the 2025-26 season will fall to a nine-year low. Sugar production for the season is estimated at around 28 million tonnes. With domestic consumption previously projected by the industry at 28.5 to 29 million tonnes, production excluding ethanol diversion is expected to fall short of demand. Factoring in a carryover stock of approximately 5 million tonnes from the previous year and exports of around 1 million tonne, the closing stock is projected at around 4 million tonnes — the lowest since 3.94 million tonnes recorded in 2016-17.
Industry sources were quoted as saying that upward movement in sugar prices is considered almost certain after ongoing state assembly elections conclude, as the government is currently releasing higher monthly release quotas to keep prices in check, a practice that may ease in the coming months.
According to data from the Indian Sugar and Bio-Energy Manufacturers Association (ISMA), crushing operations had ceased at 520 of 539 mills across the country as of April 15, with only 19 mills still operational. Sugar production excluding ethanol diversion stood at 27.48 million tonnes by mid-April.
MSP revision expectations
Market participants also expect the central government to revise the MSP of sugar upward following the conclusion of assembly elections. The MSP has remained unchanged at Rs 31 per kg since February 2019.
Ethanol demand and crude oil linkage
A third factor lifting sentiment is the renewed focus on ethanol. Brent crude oil prices have risen above $100 per barrel following escalation in the Iran conflict, prompting expectations that the government will intensify its push on ethanol blending in petrol to reduce the country’s oil import burden. The All India Distillers Association has urged the government to raise the blending target from 20 per cent (E20) to 30 per cent (E30). ISMA data show that India’s annual ethanol production capacity already exceeds 20 billion litres, well above the approximately 11 billion litres required for 20 per cent blending. There is also a market expectation that ethanol procurement prices may be raised to incentivise higher supply, which would directly benefit sugar mills with distillery capacity.
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Source : ChiniMandi
