Surge In Ethanol Demand Presents Growth Opportunities For Sugar Companies – Details
India’s push towards a 20% ethanol blending rate by 2025, ahead of schedule, reflects a strategic move to diversify its energy mix. Enhanced sugarcane acreage in Uttar Pradesh and Maharashtra, bolstered by favorable weather, promises increased raw material for the 2024-25 crushing season. This shift presents growth prospects for sugar stocks like Shree Renuka Sugars, Davangere Sugar Company Ltd, and others, poised to benefit from rising ethanol demand. Despite potential gains, current market trends saw many sugar stocks trading lower on Monday.
The Union Minister for Petroleum and Natural Gas has announced that India has reached a 15% ethanol blending rate, with an ambitious aim to achieve 20% by 2025 – five years ahead of the original 2030 target. This shift underscores India’s commitment to diversifying its energy matrix. This policy shift presents significant growth opportunities.
Additionally, a 4.5% increase in sugarcane acreage this year, supported by favourable weather in major producing states like Uttar Pradesh and Maharashtra, promises more raw material for the 2024-25 crushing season. The long-term impact of these developments will depend on market conditions and policy implementations.
Sugar stocks like Shree Renuka Sugars, Davangere Sugar Company Ltd, Bannari Amman Sugars, Avadh Sugar & Energy Ltd and many others are going to benefit from this scheme. Davangere Sugar Company, a player in sugar, sustainable power, and ethanol solutions. The company, which has diversified its portfolio to include sustainable power and ethanol solutions, is poised to capitalise on the rising demand for ethanol, a by-product of sugarcane.
At the the time of filing, most of the sugar stocks were trading lower on Monday, Shree Renuka Sugars Ltd.(down 2.56%), Simbhaoli Sugars (down 3.64%), Ponni Sugars(Erode)Ltd.(down 1.44%), Uttam Sugar Mills Ltd.(down 2.82%), Davangere Suga (down 1.98%) and Dwarikesh Sugar Industries.(down 1.30%) were trading in red.
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