Sugar stocks came under pressure on Tuesday even as concerns over tighter supplies in the upcoming season continue to build, with Avadh Sugar & Energy, Bajaj Hindusthan Sugar, Shree Renuka Sugars and Dalmia Bharat Sugar among the biggest decliners.
Avadh Sugar & Energy fell 2.79%, while Bajaj Hindusthan Sugar declined 2.05% and Shree Renuka Sugars slipped 2.01%. Dalmia Bharat Sugar & Industries dropped 1.76%, Dwarikesh Sugar Industries fell 1.72%, Mawana Sugars lost 1.52% and Balrampur Chini Mills declined 1.33%.
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The weakness comes as the government's tighter stockholding rules for sugar dealers take effect, adding another near-term pressure point for the sector. The Centre has also tightened requirements around sugar sales and dealer registration as it seeks to keep supplies adequate ahead of the festive season.
At the same time, the longer-term supply outlook is becoming more challenging. India's sugar production is expected to decline in the 2026-27 season, as El Niño-induced dryness threatens the crop that begins harvesting next month. A Bloomberg survey of 11 traders, analysts and millers estimates gross production at 29 million tonnes to 31 million tonnes in the year through September 2027, compared with around 31 million tonnes for the current season in the survey's comparison.
Monsoon rainfall is running about 15% below normal, according to the Bloomberg report, raising concerns over sugarcane yields. Expectations of lower Indian output have already contributed to a roughly 30% rise in New York raw-sugar futures this year.
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