Higher ethanol prices, procurement can boost sugar sector's prospects

Increase in minimum price of cane and export policy in new sugar season are also crucial to drive earnings

Expectations of a hike in both ethanol procurement prices and quantity has left sugar stocks buzzing. Balrampur Chini, Dwarikesh Sugar, and others gained 5 per cent or more on Thursday, with some going up on Friday as well.

This hike holds importance for sugar producers as it helps them divert excess sugar production. Moreover, ethanol is more profitable. Notably, the expected per-litre hike of Rs 2.5-3.0 is more than up to Rs 1 seen in the past few years.

Higher procurement will help mills at a crucial time, given that sugar production in the current sugar season (SS 2020-21) is expected to