Sugar stocks tumble

Shares of 11 sugar firms were down by 0.19% to 9.36% at 14:11 IST on BSE after India's sugar output increased 42% to 23.05 million tonne in five months to February of the 2017-18 marking year.

Dwarikesh Sugar Industries (down 9.36%), Triveni Engineering & Industries (down 8.15%), Sakthi Sugars (down 6.5%), Dhampur Sugar Mills (down 3.57%), Balrampur Chini Mills (down 2.93%), DCM Shriram Industries (down 2.07%), Rana Sugars (down 1.05%), EID Parry (India) (down 0.87%), Simbhaoli Sugars (down 0.56%), Shree Renuka Sugar (down 0.32%) and KCP Sugar & Industries Corporation (down 0.19%), edged lower. Bajaj Hindusthan Sugar was up 0.21%.

The S&P BSE Sensex was up 43.01 points, or 0.13% at 33,789.79.

The sugar industry has produced 23.05 million tonne of the staple sweetener between 1 October 2017 and 28 February 2018 as compared to 16.26 million tonne in the corresponding period of last marketing year, a growth of 42%, said Indian Sugar Mills' Association (ISMA) in a release on Monday, 5 March 2018. The sugar marketing year runs from October to September.

However, one needs to keep in mind that last year's sugar production was the lowest in the last 7 to 8 years, when in 2016-2017 sugar season, it had fallen from normal production of 250-260 lakh tonne to only 203 lakh tonne. Therefore, the difference as compared to last year seems to be large, but it needs to be remembered that the previous year, was a year after two years of drought in western and southern parts of the country, ISMA said.

Nearly 522 sugar mills across the country were crushing sugarcane in the current season. As on 28 February, 479 sugar mills were still working i.e. 43 sugar mills have shut crushing operations in the current season. There are reports that some more sugar mills would be shutting operations in the next couple of weeks. Most of the sugar mills which have closed are from Karnataka, Maharashtra and Tamil Nadu.

On the other hand, the availability of sugarcane is better this year due to abundant rainfall and also that sugar mills in almost all the states across the country started crushing operations much earlier and at full capacity than last year, ISMA added.

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