Shares of sugar companies remained on edge after they surged at open on the exchanges, but most of them erased gains to eventually slipped to red on Wednesday.
Dalmia Bharat's stock traded 1.25% higher at Rs 470.25 after having jumped 2.9% earlier, Balrampur Chini faced volatility, and traded marginally higher at Rs 668.45 as of 10:40 a.m; whereas shares of other prominent sugar companies dwindled.
Bajaj Hindusthan Sugar slid over 4% to Rs 21.88, Triveni Engineering and Industries Ltd. slumped 3.7% to a low of Rs 282.10, Shree Renuka Sugars fell nearly 3% to Rs 23.9, E.I.D Parry declined 1.58% to Rs 798.
The volatility comes amid concerns surrounding slowdown in sugar production and supply, in the face of the forthcoming bustling festive season.
Sugar stock zoomed in the aftermath of soaring domestic wholesale and retail sugar prices, along with global white sugar prices reaching a 16-month high. Pricier sugar made it have a premium over ethanol in India, spelling gains for stocks.
To bring some near-term relief in prices, the Centre had recently allowed duty-free imports of 10 lakh tonnes of raw sugar until October 31, 2026, and enforced strict stock limits on dealers and bulk consumers to prevent hoarding.
However, dolat capital in its research pointed out that while the provisions may cool off prices and demand in the short-term, there is not going to be a drastic correction in rates overall.
"Overall, we expect sugar prices to stabilize at elevated levels rather than correct sharply," the brokerage said, adding that for sugar mills, the sharp increase in realisations is positive for near-term profitability.
However, it flagged that the sustainability of prices at current levels "will depend on the size of the SS2026-27 crop, the extent of festival-driven demand and the actual supply response from imports and lower ethanol diversion."
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.