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Sugar stocks surged after the government removed restrictions on ethanol production from sugarcane juice, sugar syrup and molasses
Sugar Stocks
Sugar stocks surged in morning trade on September 2 after the government removed restrictions on ethanol production from sugarcane juice, sugar syrup, and molasses for the 2025-26 supply year.
The Ministry of Consumer Affairs, Food & Public Distribution announced that, beginning November 1, sugar mills and distilleries will be allowed to produce ethanol without any quantitative limits. The move marks a reversal from the current marketing year, when ethanol output from cane-based feedstocks was curbed due to lower sugarcane availability.
The Department of Food and Public Distribution (DFPD) said it will periodically review the diversion of sugar to ethanol to ensure adequate domestic availability of sugar throughout the year. This change comes as sugarcane supplies are expected to rise in the upcoming season, supported by two consecutive years of good monsoon rains that enabled farmers to expand cane cultivation.
Market Reaction
The policy shift triggered strong buying in sugar stocks. Balrampur Chini Mills rose over 7% to ₹580, while Shree Renuka Sugars gained more than 12% to ₹32.28. Bajaj Hindusthan Sugar and Godavari Biorefineries advanced up to 8%. Uttam Sugar Mills jumped over 12%, Dhampur Sugar Mills and Magadh Sugar & Energy traded around 10% higher, Triveni Engineering climbed 4.5%, and Dwarikesh Sugar along with other counters gained nearly 4%.
Legal Context: Supreme Court Ruling on Ethanol-Blended Petrol
The rally also followed a Supreme Court decision dismissing a plea that challenged the nationwide rollout of 20% ethanol-blended petrol (EBP-20). The petitioner argued that vehicles manufactured before April 2023, including some BS-VI compliant models less than two years old, are not fully compatible with fuel containing 20% ethanol.
The plea, filed by advocate Akshay Malhotra, sought directions to the Ministry of Petroleum and Natural Gas to ensure ethanol-free petrol availability across stations. However, a bench led by Chief Justice of India BR Gavai, with Justice K Vinod Chandran, dismissed the plea.
Attorney General R Venkataramani, opposing the petition, said the matter had already been carefully examined before the rollout. He alleged that the plea was a “front” for a larger lobby, stressing that the ethanol policy supports sugarcane farmers and conserves foreign exchange. “Should people outside the country decide what fuel India should use?” he remarked.
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Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a…Read More
Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a… Read More
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