Shares fall 16% over glut in spot markets

Declining sweetner prices pulled down sugar stocks by 16 per cent this week. Analysts, however, expect a rebound by the next week following the government’s intervention by extending non-levy quota release, which is expected to boost traders’ sentiment.

Leading the fall was Dhampur Sugars that fell sharply by 15.98 per cent to close at Rs 84.6 on Thursday. Simbhaoli Sugars ended the day at Rs 60.7, a drop of 14.27 per cent, whereas, Balrampur Chini fell 13.06 per cent to Rs 96.5. Despite two acquisitions in Brazil, Shree Renuka Sugars plunged 10.77 per cent while industry leader, Bajaj Hindustan, fell 8.38 per cent this week.

Sugar prices have declined 11 per cent, or Rs 400 a quintal, to trade at Rs 3,250 a quintal (M 30) and Rs 3,150 (S 30) on Thursday. The weakness in market sentiment was the supply glut in the physical market.

The government has, meanwhile, relaxed sale of non-levy sugar stocks by a week. The immediate effect was seen on sugar prices, which fell across the world.

“India’s production estimates of 16.8 million tonnes, from the earlier 16 million tonnes, have eased long-term supply fear in physical market,” BJ Maheshwari, wholetime director of Dwarikesh Sugar Industries said.