Sugar Stocks Surge As Ban On Using Cane Juice For Ethanol Is Reversed
The ministry also allowed using sugarcane juice and B-heavy molasses to produce the green fuel in the 2023-24 supply year.
Sugar stocks closed higher on Monday after the Food Ministry issued a fresh order reversing the ban on the use of sugarcane juice for making ethanol.
The ministry also allowed juice and B-heavy molasses to produce the green fuel in the 2023-24 supply year, according to a statement.
The government on Dec. 5 said that the oil marketing companies would issue a revised allocation of sugarcane juice and B-heavy molasses-based ethanol. The decision by the ministry to curb ethanol production using sugarcane came after the erratic monsoon in the country harmed the sugarcane crops. As a result, export restrictions had to be extended beyond Oct. 31.
Bajaj Hindusthan Sugar Ltd.'s was the highest gainer during the closing with a jump of 6.07%, followed by 4.70% jump in Shree Renuka Sugars Ltd. Balrampur Chini Mills Ltd. rose 4.12% while Dalmia Bharat Sugar Ltd. stock jumped 3.98%. That compared to a 0.18% decline in the NSE Nifty 50 Index.
This reconsideration by the government is a big relief for the sugar sector and indicates that the government has not put the ethanol programmer on the back burner, Atul Chaturvedi Executive Chairman of Shree Renuka told NDTV Profit.
Sugar prices have not gone up and "we are still sitting on a good load of sugar there is no reason why more sugar should not be diverted to ethanol", he said.
According to Praful Vithalani, founder-chairman of All India Sugar Trade Association, the preventive steps by the government were to maintain the sugar price and ensure that the need to export is avoided. "This is a message to the investors that the sugar ethanol chapter is not closed."
