Sugar stocks turn bitter as sugar production down by 64% in new season so far

Most sugar stocks declined after India's sugar production till mid-November reached only one-third of the sugar production during the same period of previous year.

Simbhaoli Sugars (down 4.62%), Dhampur Sugar Mills (down 2.88%), Bajaj Hindusthan Sugar (down 2.28%), Dwarikesh Sugar Industries (down 2%), EID Parry (India) (down 1.62%), Dalmia Bharat Sugar (down 1.53%), Sakthi Sugars (down 1.1%) and Triveni Engineering & Industries (down 1.02%) were top losers in sugar segment.

Meanwhile, the S&P BSE Sensex was up 0.73% at 40,765.15.

As on 15 November, 100 sugar mills were crushing sugarcane, as compared to 310 sugar mills last year, industry body Indian Sugar Mills Association (ISMA) said.

During the current 2019-20 season, sugar production as on 15 November 2019 was 4.85 lakh tonnes, as compared to 13.38 lakh tonnes produced as on 15 November 2018 in 2018-19, a declined of 63.75%.

According to ISMA, the reason for lower sugar production as compared to last season is that sugar mills in Maharashtra have not yet started their crushing operation this season. Maharashtra and Karnataka faced drought last year, because of which the area planted under sugarcane therein has dropped by about 30% as compared to last season. Plus the recent floods and extra rainfall have affected the crop further.

As per trade and port information, about 2 lakh tonnes of sugar have already been shipped out for exports. From market sources and information from sugar mills, it is learnt that contracts for another 12 lakh tonnes have been signed by the parties for exports, ISMA added.

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