In today’s trading session, sugar stocks spiked significantly after the food ministry withdrew the ban on the use of sugar care juice for ethanol production. Earlier the ban was imposed which restricted the usage of sugarcane juice in ethanol production. As the ban has been lifted, now both B-heavy molasses and sugarcane juice can be used for the production of green fuel. Earlier the ban was imposed on 7 December 2023, which restricted sugarcane juice as well as sugar syrups to be used for the production of ethanol. The ban was levied for the ethanol supply year (ESY) 2023-24.
Food Ministry’s Announcement
The Ministry of Food issued a directive to all the sugar mills and the distilleries, which says that the oil marketing companies will be revising the ban, levied on the ethanol-producing sugarcane juice and syrupy for the year 2023-24. The food ministry also directed the OMCs to share the details of the revised contracts.
The ministry made stricter guidelines regarding the supply quantity of ethanol as well in this directive. It intimated all the distilleries and sugar mills to follow the required quantity of sugar cane and B-heavy molasses used for the production of the green fuel.
The government also made it clear to the audience that the earlier ban was imposed on exports of sugar due to insufficient rainfall last year and thus lesser production of supply and sugar.
Top Sugar Stocks Price Movement
Following the announcement by the food ministry, sugar stocks jumped significantly in the earlier hours of the day. Here are some of the popular sugar stock price movements until 2 p.m. today –
| Stocks | Price Change (%) |
| Bajaj Hindustan Sugar Ltd. | 5.7 |
| Dhampur Sugar Mills | 7.5 |
| Dalmia Bharat Sugar and Industries | 8.3 |
| Uttam Sugar Mills Limited | 4.1 |
| Sakthi Sugars Ltd. | 4.5 |
Estimates on Sugar production-consumption
The government is lifting the ban on ethanol production from sugarcane juices because it is targeting to increase the production of biofuel in this fiscal 2024-25. In 2023-24 (October-September season), the sugar production declined significantly to around 33 million tonnes which was at 37.6 million tonnes in the 2022-23 season. This called for the ban that was being imposed last year. This year, the domestic consumption is projected to be close to 28 million tonnes.
Global Biofuels Alliance
In the recent G-20 summit, the Indian government introduced the global Biofuels Alliance. The main aim of this alliance is to increase the blending of ethanol with petroleum to 20%. Earlier, India surpassed its 10% target of ethanol blending in the ethanol year 2021-22. Now the country is aiming to achieve its 20% blending target by 2025-26 and this is aimed at enhancing the use of biofuels in the overall energy consumption of the nation.
Wrapping up
With the rising need for sustainable living, ethanol production has been becoming important. The government thus reversed the ban it imposed earlier on ethanol production from sugarcane juices and syrups to boost biofuel production. This also offered the required push to the sugar stocks and they jumped significantly today in the day’s trading session.
Source: TheLiveMint
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