Shares of sugar companies, on Monday, were in focus at the bourses, with Balrampur Chini Mills, EID Parry, Dwarikesh Sugar Industries, Dhampur Sugar Mills, and Dalmia Bharat Sugar and Industries rallying up to 7 per cent on improved sector outlook. In comparison, the S&P BSE Sensex was up 0.44 per cent at 50,625 points, at 11:51 am.
Last week, Prime Minister Narendra Modi said the target of blending 20 per cent ethanol in petrol advanced to 2025 from 2030 earlier. Ethanol is expected to be a key driver for the sugar industry.
The sugar sector has seen structural changes with rational alterations in the government’s policies, and flexibility provided, as diversion of surplus cane and B-heavy molasses is now allowed to produce ethanol that can be used for blending with petrol. In addition, differentiated pricing for ethanol (based on raw material) is quite attractive and has the potential to significantly reduce the cyclical nature of the sector because of the sustainable business model it provides for sugar mills.