Shares of sugar companies were on a roll as Dalmia Bharat Sugar and Industries, Avadh Sugar & Energy, Triveni Engineering & Industries, Uttam Sugar Mills and Dwarikesh Sugar Industries rallied between 10 per cent and 19 per cent on the BSE in intra-day trade on Monday on the back of heavy volumes.
Shree Renuka Sugars, Dhampur Sugar Mills and Balarampur Chini Mills were up in the range of 8 per cent to 10 per cent. In comparison, the S&P BSE Sensex was up 0.20 per cent at 52,203 points at 11:22 am.
On World Environment Day (June 5), Prime Minister Narendra Modi announced that the target of 20 per cent ethanol-blended petrol has been advanced by five years to 2025 to cut pollution and reduce import dependence.
Ethanol extracted from sugarcane as well as damaged food grains such as wheat and broken rice and agriculture waste is less polluting and its use also provides farmers with an alternate source of income.
Last year, the government had set a target of reaching 10 per cent ethanol blending in petrol (10 per cent of ethanol mixed with 90 per cent of diesel) by 2022 and 20 per cent doping by 2030, PTI reported. CLICK HERE FOR FULL REPORT
As per the Indian Sugar Mills Association (ISMA) as of June 1, 2021, 145.38 crore litres of ethanol has been supplied out of 346.52 crore litres of contracted ethanol. Of the total ethanol supplied, about 77 per cent of ethanol is made from sugarcane juice/B-heavy molasses. On average, India has achieved a blending percentage of 7.56 per cent, the industry body said.
Meanwhile, the oil marketing companies (OMCs) have on May 25, 2021, floated their fourth cycle of Expression of Interest (EOI), inviting further bids from ethanol producers for another about 26 crore litres of ethanol in the current year 2020-21, for supplies from 1st June to 30th November 2021.
In sugar season (SS) 2020, sugar inventory was lower at 10.7 M Mt as against 14.5 M Mt for SS’19 mainly due to exports. The figure is expected to further go down in ensuing SS to 9.2 M Mt, mainly on account of the higher diversion of sugar to ethanol and exports.
“Sugar industry is well poised to benefit both from global and domestic factors. A tight global demand-supply situation, favourable government policies and push for higher ethanol blending in India will keep the inventory under control. In light of the above the short to the medium-term outlook of the industry remains promising,” Dalmia Bharat Sugar said on the outlook of the sugar industry.