Sugar stocks rallied on November 10 after Union Food Minister Pralhad Joshi said the Centre has decided to allow export of 1.5 million tonne (MT) of sugar for the 2025-26 sugar season that started from October.
The Union Food Ministry has also decided to remove 50% export duty on molasses, he said in a letter dated November 7 to Karnataka Chief Minister Siddaramaiah.
The export decision was communicated to the chief minister while listing out the steps taken by the Central government to protect the interest of sugarcane farmers in the country.
Higher exports are expected to reduce domestic surplus resulting from lower diversion for ethanol production, benefiting producers.
"For the current sugar season also, the central government has decided to allow export of 15 lakh tonne of sugar and 50 per cent export duty on molasses has been removed," Joshi said.
At 12:35 pm on November 10, Balrampur Chini shares were trading 5.3% higher at Rs 455.6 apiece while those of Shree Renuka Sugars and Bajaj Hindusthan were trading 2.6% higher each.
Shares of Dhampur Sugar Mills, Dwarikesh Sugar and Uttam Sugar Mills were trading 1.9%, 2.4% and 3.7% higher, respectively.
The export allocation is lower than the 2 MT demanded by the industry.
India exported about 8,00,000 tonnes of sugar against an allocation of 1 MT during the 2024-25 sugar season that ended in September.
Food Secretary Sanjeev Chopra said recently the government was considering allowing sugar exports due to accumulation of surplus stocks as diversion of the sweetener for ethanol production fell short of expectations.
Sugar mills diverted only 3.4 MT of sugar for ethanol manufacturing in 2024-25, well below the projected 4.5 MT, resulting in high opening stocks for the current season, he said.
Sugar production for 2025-26 is expected to reach 34 MT against annual domestic demand of 28.5 MT, Chopra said.
The Indian Sugar & Bio-Energy Manufacturers Association, in its first advanced estimate, has pegged the gross sugar output in the 2025–26 season at 34.4 million tonnes. After diversion of 3.4 million tonnes for ethanol production, the association has pegged the country's net sugar output at 30.95 million tonnes.
So far in 2025, Balrampur Chini shares fell 14% while those of Shree Renuka and Bajaj Hindusthan declined 26% and 30%, respectively.
With inputs from PTI
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