Sugar Rush On D-Street: What's Fuelling The Rally Of Dhampur Sugar Mills, Balrampur Chini Mills, Shree Renuka Sugars Shares?

During early morning trade on Tuesday sugar stocks surged as the Indian government removed restrictions on ethanol production.

Sugar Stocks Spike

The shares of Shree Renuka and Dwarikesh Sugar surged over 15%, while Avadh Sugar and Ugar Sugar were trading 11% higher.

Additionally, the shares of Balrampur Chini also advanced over 7% and Triveni rose over 5% and the shares of Bajaj Hindustan's stock rose more than 12%.

What Is The Reason Behind This Rally?

India, which is the world's second largest producer of sugar has allowed the production of ethanol from sugarcane juice, syrup, and all types of molasses without any restrictions on volumes, according to an official statement released on Monday.

Earlier, production of ethanol was restricted due to a decline in sugarcane supplies.

The new ethanol supply year, which is starting from November 1, 2025, sugar mills and distilleries can start producing ethanol without any quantitative limits, the Ministry of Consumer Affairs, Food & Public Distribution said in a statement.

Additionally, the government will also periodically review sugar diversion for ethanol to maintain a steady domestic supply. In the upcoming season, sugarcane supplies are going to rise, on the back of two consecutive years of strong monsoon rains.

PIL Against E20 Mandate Dismissed By Supreme Court

India's push for E20 got a massive boost as the Supreme Court dismissed a Public Interest Litigation (PIL) challenging he Centre's mandate on E20 fuel, which needs to blend 20% ethanol with petrol.

The petition had sought the availability of ethanol-free (E0) petrol at all fuel stations, while also demanding the mandatory labelling of ethanol-based fuel to ensure consumer awareness.

Consequently, Indian sugar mills like E.I.D.-Parry, Balrampur Chini Mills, Shree Renuka, Bajaj Hindusthan, and Dwarikesh Sugar have increased their ethanol production capacity in the last few years.

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