- Sugar stocks surged as global and domestic prices rose amid supply concerns
- Dalmia Bharat Sugar gained over 8%, leading sector gains on Monday
- Global raw sugar prices hit a 10-month high, rising 10% week-on-week
Sugar stocks were in focus on Monday, with several companies gaining sharply as a rally in global and domestic sugar prices, along with concerns over tightening supplies, improved the outlook for the sector. Dalmia Bharat Sugar led the gains, rising more than 8% to Rs 460.50. Balrampur Chini and Triveni Engineering gained more than 5% each, while Shree Renuka Sugar rose over 5%. Bajaj Hindustan Sugar climbed more than 4%, while EID Parry gained over 2%.
The rally comes after a strong recovery in several sugar stocks from their 2026 lows. Dalmia Bharat Sugar has gained 67.1% from its 2026 low, while Balrampur Chini has risen 63.2%. Triveni Engineering is up 43.3%, Bajaj Hindustan Sugar has gained 18.3% and EID Parry has risen 12.6%. Shree Renuka Sugar has recovered 6.7% from its 2026 low.
Global Sugar Prices At 10-Month High
One of the key triggers for the recent rally is the sharp increase in global sugar prices. Global raw sugar futures have climbed to a 10-month high, with prices rising more than 10% on a week-on-week basis. Domestic sugar prices have also increased 5-7% over the past week, improving the earnings outlook for sugar producers.
The price movement comes amid growing concerns over global supply. Europe's sugar output is expected to fall to its lowest level in a decade, while the potential impact of El Nino on production in India and Thailand has added to supply concerns.
Brazil, the world's largest sugar producer, is also facing concerns over lower production, adding to the tightening supply outlook.
Sugar Gains Premium Over Ethanol In Brazil
The sharp rise in sugar prices has also altered the economics for Brazilian mills. Sugar is now commanding a premium over ethanol, making sugar production more attractive. This could encourage greater diversion of cane towards sugar production instead of ethanol, potentially tightening the global ethanol-sugar balance further.
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For Indian sugar companies, higher sugar prices can provide a direct boost to realisations and margins, particularly if domestic prices remain elevated.
Domestic Sugar Prices Rise
Indian sugar prices have also moved higher, supported by lower monthly release quotas and declining inventories at mills. In North India, M-grade sugar prices in Muzaffarnagar were quoted at Rs 4,900-5,000 per quintal. In Maharashtra, S-grade sugar prices in Kolhapur were reported at Rs 4,800-4,900 per quintal.
The combination of lower inventories and higher prices is positive for sugar mills, as it improves realisations and can support profitability.
The domestic supply situation is another factor attracting investor attention. Inventories are currently on the lower side, while analysts have raised the possibility of India importing sugar if domestic availability tightens further.
At the same time, the 2026-27 crushing season is expected to be delayed, which could provide additional support to sugar prices in the near term. The combination of delayed crushing, lower inventories and rising domestic prices is therefore emerging as a positive setup for Indian sugar producers.
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