Shares of Indian sugar producers rose on September 8 after a media report said that the government may soon consider a hike in price of ethanol used in fuel blending.
Chinimandi.com on September 7 reported that government may hike price of ethanol sold by sugar producers to state-owned oil marketing companies by Rs 2-3 per liter for the forthcoming sugar season 2022-23.
The proposed hike could be implemented from December 1 and will be eligible till November 30, the report said.
The government is also considering increasing the quantum of ethanol blending in fuel to 12 percent from 10 percent currently, which is seen as a measure to achieve the government’s target of 20 percent ethanol blending in fuel.
In its effort to reduce dependence on oil imports and improve foreign exchange savings government has set a target of increasing ethanol blending in fuel to 20 percent by 2025-26. OMCs are expected to buy as much as 550 crore liters of ethanol derived from sugarcane for blending purpose in 2022-23.
The increase use of ethanol blending has provided a new growth opportunity for India’s perennially underperforming sugar industry.
Further with the festive season now underway, sugar mills are expecting an upswing in demand for sugar as the country looks forward to the first festive period without COVID-19 restrictions since the onset of the pandemic in March 2020.
At 11:20 am, shares of Simbhaoli Sugars, Dharani Sugar, Blarampur Chini Mills, Uttam Sugar Mill and Dhampur Sugar were 1-5 percent.
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