Sugar stocks surged on September 5, with marquee scrips rising as much as 10% after the world's largest sugar trader said that it expects a year of sugar shortages.
Avlean, a Switzerland-based company, said that it expects a sixth straight year of sugar deficit as supply would be affected due to a bad crop in India, which is a big sugar producing country – Bloomberg reported.
“Global markets will face a 5.4 million metric ton deficit of the sweetener in the coming season,” said Mauro Virgino, trading intelligence lead at
Alvean to Bloomberg.
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Dalmia Sugar share was up 6.5 percent at Rs 431.7 at 10.17 am on the National Stock Exchange. EID Parry was up 5.94 percent at Rs 512.25. Uttam Sugar Mills was up 9.32 percent, Balrampur Chini was up 2.23 percent, and Bajaj Hindustan Sugar was up 3 percent in today’s trading session.
Investors are keeping a watch on sugar stocks as a deficit supply would lead to a pricing-led growth for the companies, thereby increasing their revenues.
Also read: Sugar production concerns drive local prices to 6-year high
In August, Reuters reported that India might ban sugar exports, halting shipments for the first time in seven years, as a lack of rain has reduced sugar production in the country.
Monsoon rains in the top sugarcane growing districts of Maharashtra and Karnataka - which together account for more than half of India's total sugar output - have been as much as 50 percent below average so far this year.
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